A Fear & Greed Index condenses market sentiment into a single score from 0 to 100, where low readings signal extreme fear and high readings extreme greed. It blends several inputs — typically volatility, momentum and other mood signals — into one easy-to-read gauge.
The idea draws on contrarian thinking: crowds tend to be most fearful near bottoms and most greedy near tops, so extreme readings can flag moments when sentiment has run ahead of fundamentals. It is a mirror of mood, not a crystal ball.
The index measures emotion, not value, and markets can stay fearful or greedy for a long time. Treat it as one piece of context among many — a prompt to check your own reasoning, never a standalone buy or sell signal.
Worked example
A reading of 10 ("extreme fear") tells you the crowd is nervous, not that prices have stopped falling.
This definition is general education, not investment advice. Markets — especially crypto — are volatile and you can lose money. Please read our disclaimer and see our methodology.