Articles tagged "Fear and Greed"

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The Fear and Greed Index scores crypto market sentiment on a 0-100 scale by combining volatility, momentum, trading volume, and social activity into a single composite number. Readings below 25 mark extreme fear. Readings above 75 mark extreme greed. The index does not generate signals on its own - it describes the zone the market is in, which changes how individual setups should be weighted.

Each input component pulls on the composite differently. Volatility drags the reading down when price swings sharply, even during rallies that eventually hold. Volume and momentum push it higher when buying is sustained across multiple sessions. Social activity captures narrative heat, which tends to lag price by days. The composite can look deceptively stable at 50 while its components are moving in opposite directions, which is why the zone matters more than the precise number.

Extreme readings are notable less for what they predict than for how long they persist. The index sat in fear territory for weeks during broad market drawdowns before any meaningful recovery emerged. It held in greed territory through entire altcoin runs before rolling over. Treating an extreme reading as a timed entry is the common misuse. Treating it as context for what class of setup is available - and how much cushion exists if the trade is early - is the more useful application. A reading of 12 shows up in XRP weekly setups as a note on the environment, not an instruction to buy.

These pieces track the index in its cycle role. How greed zones map to late-stage positioning. How readings in the mid-twenties show up alongside technical compression before directional moves. How the composite behaves around macro events that shift multiple components simultaneously. The recurring observation is that the number is most useful when it diverges from what price is actually doing.