What the Crypto Fear & Greed Index actually measures

Markets are driven by numbers, but also by emotion. The Crypto Fear & Greed Index, published daily by Alternative.me, tries to turn the mood of the crypto market into a single score. You can see today’s reading on our Markets page.

Reading the scale

What goes into it

The index combines several data sources, focused mainly on Bitcoin:

• Volatility — unusually large price swings are treated as a sign of fear.
• Market momentum and volume — high buying volume in a rising market suggests greed.
• Social media — the volume and tone of crypto discussion.
• Bitcoin dominance — a rising share of total market cap held by Bitcoin is read as a flight to relative safety, while money flowing into smaller coins suggests risk appetite.
• Search trends — changes in search interest for crypto-related terms.

Volatility and momentum carry the most weight. The provider has also used survey data at times.

How traders use it

The index is popular with contrarian traders, who follow the spirit of Warren Buffett’s line about being “fearful when others are greedy, and greedy when others are fearful.” Extreme fear can coincide with forced selling and capitulation; extreme greed with euphoria and overextended prices.

Others use it simply as a check on their own emotions: if you feel an urgent need to buy and the index reads 90, it is worth asking whether you are reacting to the crowd.

The limitations

• It is not a timing tool. Markets can stay in “extreme greed” for weeks during a strong rally, or in “extreme fear” throughout a long bear market.
• It is Bitcoin-centric. It may not reflect what is happening in other sectors of crypto.
• It describes, it doesn’t predict. The score summarises recent behaviour; it says nothing certain about what comes next.