Sentiment-Based Indices

Sentiment-Based Indices

Technical Indicators • Price Action • Chart Signals

quantified market emotion trackers

Sentiment-Based Indices are market indicators designed to quantify the emotional and psychological state of participants in the crypto space. These indices aggregate data from sources like volatility levels, social media chatter, trading volume shifts, dominance ratios, and search engine trends to assign a score or reading that reflects either “Fear,” “Greed,” “Uncertainty,” or other emotional drivers. They are typically used by traders to time entries, exits, or to gauge overall market mood in relation to broader technical conditions.

Use Case: During a sharp correction, a sentiment index drops into extreme fear territory. A contrarian investor views this as a buying opportunity, layering in capital before public sentiment recovers.

Key Concepts:

• Sentiment Marker — A tool or signal that reflects the emotional mood of the market
• Cycle Awareness — The understanding of repeating psychological and price cycles in market behavior
• Crypto Fear & Greed Index — A popular sentiment index measuring emotional extremes on a 0–100 scale
• Contrarian Investor — A strategy that goes against prevailing market sentiment, often buying when others are fearful
• Emotional Saturation — The psychological condition when sentiment reaches extreme levels
• Peak Sentiment Overload — The emotional tipping point before market reversal
• Behavioral Trigger — Events that catalyze mass investor reactions
• Bitcoin Dominance — BTC market share as a sentiment and rotation signal
• Cycle Thresholds — Critical transition points between market phases
• Bitcoin Misery Index (BMI) — Sentiment indicator measuring Bitcoin holder pain

Summary: Sentiment-based indices give structure to the emotional chaos of markets. By distilling mood into data, they help investors navigate greed-driven tops and fear-driven bottoms with greater clarity and timing precision.