Findings · 2026-11-12
Be greedy when others are fearful? We tested it.
The Crypto Fear and Greed Index is quoted every time the market drops. We tested buying Bitcoin on every Extreme Fear day and shorting it on every Extreme Greed day.
The claim. “Buy when the Fear and Greed Index shows Extreme Fear.”
What we found. Buying on fear days did worse than buying on any ordinary day.
What we measured
The index runs from 0 to 100. Its publisher calls 25 or below Extreme Fear and 75 or above Extreme Greed. We used those lines exactly as published, with no adjusting.
The rules, locked in advance: on every Extreme Fear day buy Bitcoin and hold 14 days; on every Extreme Greed day short Bitcoin and hold 14 days.
What happened
Since September 2023 there were 211 Extreme Fear days. Buying on each of them returned -0.19% on average over the next 14 days. Buying Bitcoin on any day in that period, with no signal at all, returned +1.40%. The fear signal picked worse days than no signal.
Shorting on Extreme Greed days lost 1.62% on average.
In the earlier data the fear rule looks good, and nearly all of that comes from 2020, when Bitcoin went up almost whatever day you bought. In 2022, 2025 and 2026 it lost.
Why it does not work
The index is built mostly from recent price moves and volatility. It tells you the price has fallen, which you already knew from the price. It adds no new information about what comes next.
How it was tested
- 3,202 daily index values, 1 February 2018 to 11 November 2026. Bitcoin futures prices from 2020.
- Entry four hours after the daily value is published. Costs: 0.107% taker fees plus real funding.
- Rules locked 11 November 2026 before any result. Data split at 20 September 2023; uncertainty measured across weeks.
Research on past data, not financial advice. Every test we run, failures included, is on the Proving Ground.