Trade the market mood, not the noise — average sentiment over a defined cadence window. A unique sentiment-driven strategy for crypto.
Basis: 1482 user backtests · BTCUSDT · 1d · 4 years
The Fear & Greed Index (alternative.me) measures market sentiment on a 0–100 scale, where 0 is extreme fear and 100 is extreme greed. It's computed from volatility, momentum, social media, BTC dominance, and search trends.
Most traders use the index reactively: buy when fearful, sell when greedy. This strategy goes a step further: instead of trading individual extreme values (which is noisy), it analyses whether average sentiment over a defined window (the cadence) has been fearful or greedy — and derives a directional signal from that.
The mechanism:
The core idea: market reversals correlate with sustained sentiment shifts, not single extreme prints. By the time the average sentiment over 90 days flips, the market has typically already begun moving — but the signal is statistically more reliable than reading individual fear/greed days.
This strategy is crypto-only because the F&G Index covers crypto specifically — there's no equivalent reliable index for stocks, forex, or commodities.
| Name | Default | Range | Description |
|---|---|---|---|
| F&G SMA Period | 20 | 5–60 | Smoothing of daily Fear & Greed values to remove day-to-day noise. |
| Cadence Lookback | 90 | 14–365 | Window over which average sentiment is computed. |
| Cadence SMA Period | 45 | 5–120 | Smoothing of the cadence signal — the final trigger line. |
The pre-baked mini-backtest is refreshed daily — check back soon or start a live run in the Arena.
Run in Arena →Top-10 assets by average CAGR (1d interval), aggregated from community + platform backtests. Actual results depend on parameters and period.
| Asset | CAGR | vs B&H | ★ | Runs |
|---|---|---|---|---|
| PENGUUSDT | +169.6% | +218.5pp | 0 | 1 |
| PEPEUSDT | +117.9% | +114.7pp | — | 1 |
| STXUSDT | +76.7% | +81.7pp | — | 1 |
| HBARUSDT | +62.3% | +29.0pp | — | 10 |
| BNBUSDT | +49.6% | -27.2pp | — | 11 |
| FTMUSDT | +46.0% | -75.6pp | — | 8 |
| SEIUSDT | +45.9% | +75.9pp | — | 1 |
| SUIUSDT | +43.8% | +60.0pp | — | 6 |
| DOGEUSDT | +39.4% | -35.4pp | — | 10 |
| ETHUSDT | +34.3% | -10.6pp | — | 10 |
// Step 1: Smooth daily F&G
fg_smoothed = SMA(daily_fg, fg_sma_period)
// Step 2: Average over cadence window
cadence_avg = SMA(fg_smoothed, cadence_days)
// Step 3: Smooth the cadence (final signal line)
cadence_signal = SMA(cadence_avg, cadence_sma_period)
// Entry/Exit: signal direction
if cadence_signal[now] > cadence_signal[now - 1]:
if position.is_flat:
BUY
if cadence_signal[now] < cadence_signal[now - 1]:
if position.is_long:
SELLSingle-day extreme readings are unreliable — F&G can be 25 today and 65 tomorrow during volatile market phases. The cadence approach asks: "has sentiment been on average fearful or greedy over the last 90 days?" That smoothed signal is much more reliable for directional bets.
The F&G Index is computed for the broader crypto market (BTC-weighted), so the signal applies to altcoins too — but altcoins amplify both directions. In practice, when F&G cadence flips bullish, altcoins move further than BTC. Combine with the Altcoin Season filter (Pro+) to time altcoin allocation.
alternative.me's index goes back to February 2018. With a 90-day cadence + 45-day SMA, the strategy needs ~135 days of data before producing the first signal. That means usable backtests start around mid-2018.
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Check out our Strategy Insights Reports — pre-baked deep-dives with historical results, comparisons, and market context.