Learn how sentiment indicators like the Fear & Greed Index work and what they measure.
Educational Demo: The gauge below shows a simulated value for demonstration purposes. It does not reflect real-time market data. For actual sentiment data, see the resources linked at the bottom of this page.
Simulated value for educational demonstration only
A Fear & Greed Index is a type of sentiment indicator that attempts to measure the overall emotional state of market participants. The concept is based on the observation that investor behavior tends to swing between fear (risk aversion) and greed (risk appetite), and these emotions can influence market prices.
Various financial media outlets and data providers publish their own versions of fear and greed indices. The most well-known include CNN's Fear & Greed Index for traditional markets and Alternative.me's Crypto Fear & Greed Index for cryptocurrency markets. Each uses different methodologies and data inputs.
Different providers use different methodologies, but common inputs include:
| Range | Label | General Meaning |
|---|---|---|
| 0-24 | Extreme Fear | Widespread pessimism among market participants |
| 25-44 | Fear | Generally cautious sentiment |
| 45-55 | Neutral | Balanced sentiment, neither fearful nor greedy |
| 56-74 | Greed | Generally optimistic sentiment |
| 75-100 | Extreme Greed | Widespread optimism among market participants |
While sentiment indicators are popular, they have significant limitations that users should understand:
Sentiment indicators describe current conditions—they do not predict future market movements. Markets can remain in "extreme" territory for extended periods, and sentiment readings at any level can persist or reverse without warning.
Many inputs used in sentiment calculations are based on recent price movements. By the time a sentiment indicator shows "extreme fear," prices may have already declined significantly. Similarly, "extreme greed" readings often appear after prices have already risen.
Different providers calculate their indices differently, leading to potentially conflicting readings. There is no standardized or "official" fear and greed index, and each version reflects its creator's choices about what data to include and how to weight it.
If enough market participants use sentiment indicators to make decisions, their collective actions could either reinforce or counteract the signal, making the indicator less reliable over time.
Sentiment indicators should not be used as trading signals or the basis for investment decisions. There is no reliable evidence that buying during "extreme fear" or selling during "extreme greed" leads to better investment outcomes. Past sentiment readings have no predictive power for future returns. Always conduct thorough research and consider consulting financial professionals before making investment decisions.
If you're interested in viewing real sentiment data, here are some publicly available sources:
These external resources provide actual data rather than the simulated demonstration shown on this page.
Fear and greed indices are popular tools for visualizing market sentiment, but they are descriptive rather than predictive. They can provide context about general market mood but should not be used as the primary basis for investment decisions. Understanding their construction and limitations helps place them in proper perspective as one of many data points available to market observers.