The Fear and Greed Index measures market sentiment in crypto, ranging from extreme fear to extreme greed on a scale of 0 to 100. It aggregates data such as volatility, trading volume, social media trends, and surveys. Traders use it to gauge whether the market is overly emotional — potentially signaling tops (greed) or bottoms (fear).
Example:
A reading of 85 signals extreme greed, suggesting traders are overly bullish and a correction might be due. A reading of 10 indicates extreme fear, which could be a buying opportunity.