Fear & Greed Indices
Fear & Greed indices compress dozens of market signals into a single number between 0 and 100, giving you a quick read on whether the market is driven by panic or euphoria.
A Fear & Greed index is a composite sentiment indicator. Low readings (near 0) signal extreme fear, while high readings (near 100) signal extreme greed. The number itself is a weighted blend of multiple underlying inputs.
Key Points
- Fear & Greed indices are sentiment gauges, not price forecasts
- They are contrarian indicators: extreme readings often precede reversals
- There are two major versions: the CNN Fear & Greed Index (traditional markets) and the Crypto Fear & Greed Index (crypto markets)
- Exact calculation methodologies are not fully disclosed by their publishers
Reading the Scale
Both TradFi and crypto Fear & Greed indices use a 0-to-100 scale with the same general zones:
The Contrarian Signal
Warren Buffett's famous advice, "be fearful when others are greedy, and greedy when others are fearful," captures the core idea. Extreme Fear & Greed readings often mark turning points because they reflect crowded positioning. When everyone is already selling, there are few sellers left, so prices tend to stabilize or bounce. The reverse applies to extreme greed.
Fear & Greed Index Simulator
Drag the component sliders to see how each input affects the composite score.
CNN Fear & Greed Index (TradFi)
The CNN Fear & Greed Index tracks sentiment across U.S. equity markets. It blends seven components, each scored 0-100, into a single composite reading. CNN publishes the index daily with a current reading, plus 1-week, 1-month, and 1-year lookback readings.
The Seven Components
Each component produces its own 0-100 reading, and the composite index is an equal-weight average of all seven. CNN does not disclose the exact normalization formulas for each sub-indicator.
How to Use It
The CNN index is most useful at its extremes. In the middle range (40-60), it tells you relatively little. At the edges, it becomes more informative:
- Below 20: Historically correlates with market bottoms or near-bottoms. The March 2020 COVID crash, the late 2018 sell-off, and the August 2015 flash crash all saw readings in the single digits or teens.
- Above 80: Often appears after extended rallies, right before corrections. Not a precise timing tool, but a warning that sentiment is stretched.
It's Not a Timing Tool
Extreme readings can persist for weeks. The market can stay greedy (or fearful) longer than you might expect. Use the index as one input among many, not as a standalone buy/sell signal.
Crypto Fear & Greed Index
Unlike TradFi, crypto has multiple competing Fear & Greed indices:
| Provider | Coverage | Notes |
|---|---|---|
| CoinMarketCap | Broad crypto | The current default reference. Replaces surveys with market cap breadth. |
| Alternative.me | Bitcoin-focused | Historically the most cited. Surveys component currently paused. |
| CoinGlass | Multi-asset | Includes derivatives data (funding rates, liquidations). More market-structure-aware. |
These indices use similar inputs but different weights and methodologies, so their readings can diverge. The CoinMarketCap Fear & Greed Index is the most practical default today, since Alternative.me has paused its surveys component. Use the toggle below to compare component weights across providers.
Components and Weights
Methodology Caveat
None of these providers publish the exact formulas for how each component is normalized into its 0-100 sub-score. The weights above are what they disclose (or, in CoinGlass's case, approximate), but the internal scoring logic is a black box. Treat any Fear & Greed index as directionally useful, not as a precise measurement.
Bitcoin Dominance as a Sentiment Signal
The Bitcoin dominance component deserves extra attention because its interpretation is counterintuitive:
Rising BTC Dominance
Leans toward Fear
- Capital rotating from altcoins into BTC
- Investors seeking relative safety within crypto
- Altcoin speculation cooling off
- Often accompanies broader market sell-offs
Falling BTC Dominance
Leans toward Greed
- Capital flowing from BTC into altcoins
- Increased appetite for riskier, smaller-cap tokens
- Altcoin speculation heating up
- Often accompanies euphoric "alt season" rallies
Historical Extreme Readings
Extreme Fear & Greed readings have historically coincided with major market events. The table below is not exhaustive, but illustrates the pattern:
TradFi and Crypto Can Diverge Sharply
The FTX collapse in November 2022 is a clear example. The Crypto Fear & Greed Index plunged to Extreme Fear while the CNN index stayed in the Greed zone. Crypto-specific events can push crypto sentiment to extremes without affecting traditional markets at all. Do not assume one index is a proxy for the other.
Comparing the Two Indices
CNN Fear & Greed
Traditional Markets
- Seven components, all from regulated market data
- Includes forward-looking options data (VIX, put/call ratio)
- Published since 2012, long track record
- Equal-weighted across components
- Data sources are transparent and verifiable
Crypto Fear & Greed
Cryptocurrency Markets
- Six components, mix of market data and social signals
- Uses realized volatility (backward-looking), not implied
- Multiple providers (CMC, Alternative.me, CoinGlass) with different weights
- Explicitly weighted, though exact normalization is undisclosed
- CoinGlass adds derivatives data (funding, OI, liquidations)
Practical Limitations
Fear & Greed indices are popular because they are simple. That simplicity comes with trade-offs:
| Limitation | Detail |
|---|---|
| Lagging | Both indices use trailing data (moving averages, recent volume). They confirm sentiment more than they predict it. |
| No position sizing guidance | A reading of 10 tells you sentiment is fearful, but not how much to buy or whether to buy at all. |
| Black box normalization | Neither CNN nor the crypto index providers fully disclose how raw inputs are mapped to the 0-100 scale. |
| Extreme readings can persist | Markets can stay in Extreme Fear or Extreme Greed for weeks. The index can read 15 and the market can still drop another 30%. |
| Crypto index is BTC-dominated | The crypto index tells you very little about sentiment toward specific altcoins or DeFi sectors. |
| Social media gaming | The crypto index incorporates social media data, which is susceptible to bot activity and coordinated campaigns. |
Relationship to Volatility Indices
Fear & Greed indices and volatility indices both measure market mood, but they capture different things:
- VIX and BVIV/DVOL measure the price of insurance (how much it costs to hedge). They are derived entirely from options prices and are forward-looking.
- Fear & Greed indices blend multiple signals (price trends, volume, credit spreads, social media) into a composite score. They are more holistic but noisier.
In practice, the VIX is one of the seven inputs to the CNN Fear & Greed Index. When VIX spikes, the Fear & Greed Index tilts toward fear. But the other six components can offset or amplify that signal.
💡 Tip: Try answering each question yourself before revealing the answer.
Related:
- Volatility Indices - VIX, BVIV, EVIV, and DVOL
- Vol Regimes - Low, normal, high, and crisis volatility
- Implied Volatility - The market's expected move
- CNN Fear & Greed Index - Live TradFi reading
- CoinMarketCap Fear & Greed Index - Live crypto reading
- Alternative.me Fear & Greed Index - Historical crypto reading
- CoinGlass Fear & Greed Index - Derivatives-aware crypto reading