Beer & Weed Index: the Fear & Greed Index in bar talk

It is a market-sentiment gauge. One number from 0 to 100 tells you how nervous or how euphoric crypto investors are right now. Low means fear, high means greed.

It is not a new indicator. It is the Crypto Fear & Greed Index, the most widely used sentiment reading in crypto, translated into bar talk. We renamed it because “fear” and “greed” are abstract, while “the bar is empty” and “somebody just bought a monkey JPEG with their rent” are not. The original, unrenamed version is on our Fear & Greed Index page.

The score falls into one of five bands. The idea behind the scale is contrarian: when almost everyone is fearful, much of the bad news may already be in the price, and when almost everyone is euphoric, much of the good news may be. The bands show you which of those two moods the market is in.

The five bands are our own grouping of the 0 to 100 score. Alternative.me uses its own labels, from Extreme Fear to Extreme Greed, with different cut-offs, so a reading can land in a different band here than on their site.

The score is calculated by Alternative.me, not by us. Their published method blends six inputs: volatility (25%), market momentum and volume (25%), social media (15%), surveys (15%), Bitcoin dominance (10%) and search trends (10%). At the time of writing they list the surveys input as paused, so the live score runs on the other five.

We pull the daily value and its full history, show today’s reading, and pair the history with the Bitcoin daily close. The new value normally appears shortly after 00:00 UTC.

The raw index jumps around from day to day. On the history chart you can switch between Raw and a 7-day, 30-day or 60-day smoothing. Each smoothed point is the simple average of that day and the days before it, so a 30-day line is the average of the last 30 daily readings.

Smoothing makes the slow swings of the market easier to see, at the cost of reacting later. Use Raw to spot sudden shifts and 30 or 60 days to judge the bigger mood. Smoothing is our addition; the source index is not smoothed.

Keep these in mind before you act on a reading.

A made-up example. The index has sat at 15 (Sober) for two weeks while the price is flat and the headlines are negative. An investor who follows sentiment might use that as a reason to look again at adding in small, regular steps, and to check it against other indicators first. Our guide on DCA during extreme fear goes deeper on that.

Now the index has climbed to 85 (Blackout) while the price doubled in a month. The same investor might ask whether they are still being careful. The score does not tell you what to do. It tells you what everyone else is feeling. For a second opinion, put it next to Risk Wave.

This explainer is free to read for everyone. In the app, the history chart against the Bitcoin price, the smoothing options and the share card are part of Premium. See the pricing page for what is included today.