Crypto Fear & Greed Index: how to read it
The Fear & Greed Index sums up the mood of the crypto market in a number from 0 to 100. For CryptoBruj it’s an indicator you read the other way round: when almost everyone is greedy, it’s time to be careful, and when there’s extreme fear, it’s time to start thinking about buying. In this lesson of his course he explains how to read it, with examples of bitcoin tops and bottoms.
What it measures and how to read it
The index is published by Alternative.me once a day. It combines volatility, volume and price momentum, social media chatter, bitcoin’s share of the total market and Google searches, and sums it all up in a number:
| Value | What it says |
|---|---|
| 0 to 25 | Extreme fear |
| 26 to 46 | Fear |
| 47 to 54 | Neutral |
| 55 to 75 | Greed |
| 76 to 100 | Extreme greed |
It updates with bitcoin’s daily candle, shortly after midnight UTC. It has existed since February 2018. It’s a reading of the overall mood, not something to trade minute by minute.
An indicator you use the other way roundmin 0:35
CryptoBruj calls it a contrarian indicator. When almost everyone is greedy, whoever wanted to buy has already bought, and there are few people left to keep pushing the price up. When there’s extreme fear, the opposite happens: whoever wanted to sell has already sold.
If there’s greed, start thinking a bit about being bearish. If there’s fear, start thinking about buying a little.
What bitcoin’s history showsmin 1:42
In the video he goes over the index’s history against the price of bitcoin:
- December 2020: the index spends several days at 93 and 94, with bitcoin climbing nonstop from $9,000 to $42,000. Then comes a 30% correction.
- May, June and July 2021: the index hits 10, extreme fear, on every sharp drop. Then comes the rise.
- November 2021: greed above 70 at what was then the all-time high. From there, very sharp drops.
Every time people get truly excited, the price is near a top. And the same goes for bottoms.
It also works day to daymin 3:55
You don’t have to wait for an extreme. If bitcoin rises a lot in one day and the index jumps, for example, from 58 to 70, a correction is quite possible. It isn’t a sell signal: it’s a warning not to open a long chasing the price.
What the index doesn’t do
- It doesn’t tell you when the price will turn. Fear or greed can last for weeks.
- It doesn’t replace the chart. The entry, the stop and the size come from your analysis and your plan.
- It’s no use for intraday trading: it changes once every 24 hours.
Use it as context before you open a trade. For the rest, see how to read levels in support and resistance and where to put your exit in stop loss and take profit.
Check it today
In the Fear & Greed tool you have today’s value compared with yesterday’s, last week’s and last month’s. With your account, we also alert you when it changes zone. If you trade futures, combine it with funding: very high funding with extreme greed means almost everyone is on the same side.
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Educational content. This is not financial advice or an investment recommendation. Trading with leverage can make you lose all the capital you put in.