Crypto Fear and Greed Index: A Beginner's Guide
This reference indicator converts cryptocurrency market sentiment into a score from 0 to 100. It can help show whether fear or greed is becoming extreme, but calculation methods vary among versions and it should not be used as the sole basis for a decision.
What the Score Means
The index measures market sentiment from 0 to 100. A value near 0 indicates “extreme fear,” often accompanied by doubt, uncertainty, and potential undervaluation. A value near 100 indicates “extreme greed,” reflecting excessive confidence, optimism, and potential overvaluation. It describes collective sentiment and does not directly prove that an asset is fairly priced or certain to reverse.
How the Index Is Constructed
Different indexes may consider volatility, price momentum, trading volume, social-media discussion, Bitcoin dominance, and search trends; some versions also use public surveys. How each input is scored depends on the provider. One should not assume that every version always uses the same indicators or weights.
How to Use It Properly
The index is useful for identifying whether market sentiment is at an extreme, but different versions exist and may use different indicators, weights, and calculation methods. Because the data often focuses on Bitcoin, the result may also primarily reflect sentiment toward Bitcoin. Learners should combine it with other market indicators when forming a judgment.
Original Tutorial
https://www.binance.com/zh-CN/academy/glossary/crypto-fear-and-greed-index
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