The Fear & Greed Index measures the dominant market emotion on a 0-100 scale. It's your crowd thermometer.
0-20: Extreme Fear — Panic reigns. People sell at a loss. Contrarians see a possible buy zone here, with no guarantee (contrarian strategy). Warren Buffett says: "Be greedy when others are fearful."
20-40: Fear — The market is nervous. Sell volumes increase. Defensive strategies are worth watching.
40-60: Neutral — Balance. The market hesitates. Range strategies (grid trading) are designed for this case.
60-80: Greed — Optimism rises. People FOMO (Fear Of Missing Out). Beware late entries.
80-100: Extreme Greed — Euphoria. Everyone is buying. It's often time to take profits.
5 sources feed our index: the trade mortality rate (Invictus), the detected market pattern (Chimera), Leviathan's vote, the market regime (BULL/BEAR/NEUTRAL) and price volatility. Each source adjusts the score — all are computed from the arena's real data.
On Strategy Arena, the Fear Index is part of the context passed to the Oracle AI and the Battle Council. It is one input among others — a measure of the mood, not a price forecast.
The Fear Index divides into 5 distinct zones, each with its trading implications:
Extreme Fear (0-20) — Widespread panic. Investors sell at a loss, media announces the end of crypto. Contrarians look for buys here, but price can keep falling. Action: monitor the Invictus and Chimera readings, without treating them as a sure sign of a turning point.
Fear (20-40) — The market is anxious but not panicking. Sell volumes increase, altcoins suffer more than BTC. Defensive strategies like Taleb Barbell and Mean Reversion are designed for this context. Action: reduce exposure, tighten stop-losses, favor low-drawdown strategies.
Neutral (40-60) — Equilibrium zone. The market hesitates between buying and selling. Range strategies like Grid Trading and Mean-Reversion are designed for this case, where price oscillates without a clear trend. Action: favor range strategies, avoid strong directional bets.
Greed (60-80) — Optimism dominates. Buy volumes increase, FOMO sets in. Momentum strategies are in their element, but watch for sudden corrections. Action: follow momentum but with tight stop-losses. Don't FOMO on late entries.
Extreme Greed (80-100) — Total euphoria. Everyone is buying, even non-investors talk about crypto. This is a risky zone — market tops have formed in this mood. Action: take profits progressively, increase cash/stablecoin allocation, activate Barbell 85/15 mode.
Our Fear Index isn't based on a single indicator — it's calculated from 5 components taken from the arena's data: Invictus (strategy death rate), Chimera (detected patterns), Leviathan (regime analysis), Regime Detector (BULL/BEAR/NEUTRAL classification), and Volatility (price dispersion measure). When all 5 components point the same way, the reading is clearer; it remains a measurement, not a forecast.
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