“When others are greedy, I am fearful; when others are fearful, I am greedy” — Buffett's famous saying is also applicable in the crypto market. The crypto market is an emotion-driven market, and changes in market sentiment directly affect asset prices. As a seasoned analyst, I believe that learning to analyze market sentiment is key to making money in the crypto market, as it can help you grasp market trends in advance.
First, let's understand how to measure market sentiment. There are many commonly used market sentiment indicators, such as the Fear and Greed Index (F&G Index), Market Sentiment Index (MVI), fund flows from exchanges, and social media heat. The Fear and Greed Index ranges from 0 to 100, where 0 indicates extreme fear and 100 indicates extreme greed; a Market Sentiment Index (MVI) below 20 indicates extreme pessimism, while above 80 indicates extreme enthusiasm. For example, at the peak of the bull market in 2021, the Fear and Greed Index exceeded 90, indicating that the market was in a state of extreme greed, followed by a market correction; at the bottom of the bear market in 2022, the Fear and Greed Index was below 10, indicating that the market was in a state of extreme fear, followed by a market rebound.
Secondly, let's analyze the relationship between market sentiment and price. When market sentiment is in a state of extreme greed, investors rush in, pushing prices up, but at this time, risks are also accumulating, and a correction may occur; when market sentiment is in a state of extreme fear, investors rush to sell, leading to price declines, but at this time, assets may have been severely undervalued, making it a good buying opportunity. For example, in November 2025, the MVI index dropped to its lowest level since the 2022 bear market, with a value of only 20, the market was in a state of extreme pessimism, many investors cut their losses and left, but I believed this was a good opportunity to buy the dip, and as a result, the market rebounded shortly after.
Then, let's learn how to make money by leveraging market sentiment. My strategy is: when market sentiment is in a state of extreme fear or pessimism, buy undervalued mainstream coins at a low; when market sentiment is in a state of extreme greed or frenzy, sell part of the assets at a high to lock in profits. At the same time, combine other indicators for analysis, such as technical analysis, fundamental analysis, etc., and do not rely solely on market sentiment indicators for decision-making.
In addition, we must also learn to pay attention to changes in social media and news opinions. Trending topics on social media, views from KOLs, and reports from news media all affect market sentiment. For example, if a well-known KOL recommends a certain coin, it may lead to an increase in that coin's price; if a mainstream media outlet reports negative news about the crypto market, it may cause panic in market sentiment and a price drop. We need to learn to discern the truth of information and not be misled by false information. If you want to learn more methods and tools for market sentiment analysis, follow me @链上标哥 so you don't get lost!
