# Fear and Greed Index By [FlendCryptoClub](https://paragraph.com/@flendcryptoclub) · 2025-10-23 --- The Crypto Fear and Greed Index is a market sentiment indicator that measures how investors feel about the market. Though it often reflects the overall crypto mood, it revolves around bitcoin. It ranges from 0 to 100. Fear: Is a period of panic and nervousness and price is probably undervalued. Greed: Is a period of overconfidence, utmost hopium. Price is probably overvalued. 0 –24 = Extreme Fear 25 – 49 = Fear 50 –74 = Greed 75 – 100 = Extreme Greed It’s a number calculated from several market factors such as volatility, trading volume, social media sentiment, surveys, and bitcoin dominance. **How is FGI calculated?** -------------------------- Certain data sources are combined to predict the market FGI. The exact formula is not generally known, below is what we found out from reliable sources **Momentum and volume**: market momentum and volume will indicate investors' emotion. High volume and momentum shows greed. 25% of 100% FGI. **Volatility**: Making up 25% of the pool, high volatility means that money is moving, and quickly. High volatility often signals fear and panic. **Social media(15%)**: social media mentions, hashtags are used to gauge how traders are positioned. **Surveys(15%)**: opinions are gotten from investor polls. **Bitcoin Dominance(10%)**: studying BTC market share indicates when the market is playing safe and when it's risk-thirsty. **Google trends(10%)**: this data source includes Google search results relating to crypto. Used to understand what traders are searching for at a particular time. **Proven ways to use the FGI tool to enhance trading include;** --------------------------------------------------------------- * **Using it as a contrarian indicator**: buying when the market is at extreme fear and selling when at extreme greed. * **Making good trade entries**: it is instrumental in avoiding FOMO buys and panic selling. * Frequent fear and greed zones coincide with long bear and bull seasons. * When greed is high, traders tend to over-leverage. The index warns you to reduce exposure or avoid risky altcoins. During fearful periods, it encourages calm accumulation instead of panic selling. **Limitations of FGI** ---------------------- * This tool is so aligned with Bitcoin that it can be called ‘bias’. The data is heavily weighted to bitcoin, not the whole market. * It is a short-term indicator, not very suited for long-term investing. * It shouldn't be used alone. It has to be combined with technical analysis **How to combine fear and greed index with technical analysis** --------------------------------------------------------------- **Combining with Support and resistance** * When fear is <24 and price level is at a key support level, look for a buying opportunity. * When greed is higher than 74, use the resistance level to gauge a potential reversal. **Confirm with price action** * For extreme fear, search for bullish reversal patterns like; double bottom and bullish engulfing candle. * For >75 extreme greed, search for bearish patterns, like; double top, rising wedge and resistance rejection. **With momentum indicators** _Relative Strength Index_ * For example, if the RSI is at <30(overbought) and markets at extreme fear, the market is at a buy zone. * If RSI is at >75 and the FGI is at >75, the market is overbought and overtly greedy. Look for buying opportunities. **In conclusion** The Crypto Fear and Greed Index helps you read market emotions, while Technical Analysis confirms what price is doing. Using them together helps you trade smarter, avoid emotional mistakes, and plan your entries and exits better. To get more tips on becoming a profitable trader, join the Flend community through any of the media below; [**x.com**](https://twitter.com/FlendCryptoClub?t=inxX2B1U66ottpijD1Mj1w&s=09) [**FlendCryptoClub**](https://t.me/FlendCryptoClub) [**Flend Insights Club**](https://chat.whatsapp.com/Bgj42kWczqB7GhVOzPYcNb) Kickstart your trading career here! Register and get your welcome bonuses [click here](https://partner.bitget.ng/bg/NSGFCZ) --- *Originally published on [FlendCryptoClub](https://paragraph.com/@flendcryptoclub/fear-and-greed-index)*