Sentiment Analysis for Crypto: Featuring FEAR and GREED!

Introduction: Programmed for Loss?

Imagine this: you are walking down a dark alley, you hear a suspicious noise – your heart is pounding, your legs are carrying you away. This is fear, an ancient survival instinct. Now imagine that you’ve had a delicious meal at a new restaurant — you’re happy, and you’ll definitely go back there again. Have you seen someone buy a cheap “magic internet coin” and become a millionaire? Envy boils up inside you, and your hand reaches out to buy the same thing. This is not a weakness — it is human nature, our built-in software that has helped us survive for thousands of years.

But here’s the problem: in today’s financial markets, especially wild ones like cryptocurrencies, these ancient programs often kick in at the wrong time and lead straight to losing money. Almost all of us go through this cycle:

1. Envy/Hope: “Wow! That guy bought some coins for $1,000, and now he has a villa! I want that too!” (Example 2021: Shiba Inu. Example 2024: the same story with new meme coins like Dogwifhat (WIF) or Book of Meme (BOME), which skyrocketed by 1000%+ in a matter of days). We see the success of others and want to replicate it, without always thinking about the risks.
2. Euphoria/Greed: “Oh yes! My coins have risen 50% in a week! I’m a genius! I need to buy more, it’s a rocket to the moon!” A feeling of invincibility, confidence. The brain screams: “More! More!”
3. Fear/Panic: “What?! The price has fallen 30% in an hour?! Everyone is selling! I need to get out quickly before I lose everything!” Rational thinking shuts down, and the instinct for self-preservation screams, “Run for your life!” We sell… often at the bottom.
4. Regret: “Damn! I bought at the peak when everyone was shouting ‘Hurray!’ and sold at the bottom when everyone was crying. Why am I so predictable?”

Sound familiar? We all do it (and that’s okay!)

If you are reading this and nodding your head, you are not alone. The author of the article admits that even knowing that memecoins are a lottery with enormous risk, even with his own strategy, he caught himself thinking, “What if this new memecoin is the one? What if I miss my chance?” This is a completely normal reaction. Why are we so sure?

1. Personal experience: How many times have friends or acquaintances asked you in 2023-2024: “Hey, have you heard about [insert name of new meme coin]? People are making a fortune on it! How do I buy it?” Always after the price has already skyrocketed.
2. Market data: Look at the charts. When one of the big meme coins (whether it was old DOGE or new PEPE) skyrocketed, hundreds of small meme coins immediately started to grow. Why? Because crowds of newbies (retail investors) rushed to find “the next big thing,” hoping to repeat the success. This mass movement is pure FOMO (Fear Of Missing Out).
3. Reaction to the news: Here’s a recent example from May 2025. Imagine that a major technology company (say, Apple) announces the test launch of its token in some new gaming metaverse. The headlines scream: “Apple breaks into Web3!” What happens? The price of this metaverse platform’s token skyrockets by 50-100% in a matter of hours. People buy on emotion without understanding: what exactly does the partnership mean? How big is it? Is there any real benefit to the platform right now? Often, the news turns out to be overrated, and after a couple of days, the price rolls back to its original level or even lower. This doesn’t mean that all news is bad! It means that the emotional reaction of the crowd is often exaggerated and short-lived.

Why Does Technical Analysis (Sometimes) Work? It’s All About Us!

Have you ever wondered why graphic patterns on price charts (head and shoulders, flags, triangles) sometimes work? The secret is that they reflect mass psychology! These patterns form because large groups of people, influenced by the same emotions (fear, greed, hope), act predictably.

An example of FOMO in action (Wyckoff’s 2025 scheme): Large players (“whales”) are aware of our tendency toward FOMO. Here’s how they can take advantage of it:

1. Accumulation: The whale quietly buys up the asset at a low price.
2. Growth (Markup): He starts buying actively, artificially driving the price up. The chart rises nicely!
3. Bait (FOMO phase): News of the growth spreads across social media and the media. New investors see the upward trend and are afraid of missing out on profits. They buy up the asset en masse, pushing the price up even more. That’s exactly what the whale wants!
4. Distribution: While everyone is rejoicing and buying at the peak, the whale begins to sell his reserves at a profitable price to newcomers.
5. Decline (Markdown): Supply (whale sales) exceeds demand (dwindling flow of newcomers). The price begins to fall. New investors panic and sell at a loss, exacerbating the decline. The whale has already made a profit.

Your Arsenal 2025: How to Measure “Crowd Mood” and Not Get Carried Away

Understanding emotions is half the battle. The other half is the ability to objectively assess what currently dominates the market: fear or greed? To do this, there are powerful (and not so powerful) tools available in 2025. The key rule: never rely on just one indicator! Combine them like a chef combines ingredients.

Crypto Fear & Greed Index:

 
[Current link: https://alternative.me/crypto/fear-and-greed-index/]

• What is it? The most famous “thermometer” of crypto market sentiment. It brings together data from various sources (volatility, trading volumes, social networks, surveys, Bitcoin dominance, etc.) and outputs a number from 0 (extreme fear) to 100 (extreme greed).
• How does it work? Imagine a scale from “freezing terror” (0) to “unbridled joy” (100). The index attempts to measure where the average investor currently stands on this scale.

How to use it in 2025?

• Extreme values are a warning sign: A prolonged stay in the “Extreme Greed” zone (85+) often precedes a correction (fall). A prolonged stay in the “Extreme Fear” zone (25-) may signal a possible bottom and entry point for the brave. BUT! This is not an exact timing! In 2021, the index was in “greed” for a long time before the crash. In 2025, it may get stuck in ‘greed’ for a long time during a strong bullish trend. Don’t sell just because of “greed”!
• The trend is more important than a single value: Watch to see if sentiment is changing. A shift from “fear” to ‘neutral’ or “greed” amid rising prices may confirm the strength of the trend. A sharp drop in the index amid rising prices is an alarm bell signaling imbalance.

This is only one indicator! Always verify its signals with other data (technical analysis, fundamental news, on-chain metrics).

Google Trends: [Current link: https://trends.google.com/]

1. What is it? A free tool that shows how often people around the world search for certain words on Google.
2. How does it work? Imagine that you can count how many times a day people ask for directions to a particular store. If suddenly a crowd asks about one store, it means that there is something interesting there (or loud advertising). The same applies here: a surge in queries for “Bitcoin,” “Ethereum,” “how to buy cryptocurrency,” or even the names of specific memecoins (such as “buy Dogwifhat”) indicates a surge in interest among ordinary people (retail investors).

How to use it in 2025?

• Peak interest = Peak FOMO? Historically, maximum spikes in search queries for crypto-related keywords have often coincided with market peaks (e.g., late 2017, spring 2021). When even those who were not previously interested in cryptocurrencies start asking about them en masse, it can be a sign of market overheating and hype (FOMO).
• Regional characteristics: Look at which countries the queries are coming from. A sudden spike from a new region may indicate a new source of demand.
• Term comparison: Compare the queries “buy Bitcoin” and “sell Bitcoin.” The ratio can give you an idea of the prevailing sentiment.
• “Taxi driver rule”: An old stock market adage says, “When your taxi driver starts giving you stock advice, it’s time to sell.” Adaptation for crypto: “When your friends who are far from technology start asking how to buy the latest meme coin, be careful, a correction is possible.” Google Trends is an objective measure of this “taxi driver rule.”

 

 

Social Media and Data Analysis Platforms (Deep Dive):

Here, outdated services (Augmento, CryptoRadar) are replaced by the current leaders of 2025.

The TIE (https://www.thetie.io/):

• What is it? An advanced platform specializing in sentiment analysis in the crypto sphere. It analyzes millions of messages on X (Twitter), Reddit, Telegram, forums, and news sites in real time.
• How does it work? Complex algorithms (including AI) determine the tone of messages (positive, negative, neutral) and their intensity. The platform creates its own sentiment indices for hundreds of crypto assets.

Key metrics (2025):

• Sentiment Score: A numerical score from 0 to 100, where higher = more positive.
• Sentiment Change: How much sentiment has changed recently (24 hours, 7 days). A sharp increase in positivity may precede a price increase (or be a consequence of it), while a sharp decline may be the opposite.
• Social Dominance: What percentage of all conversations about crypto are devoted to a specific asset (for example, “What percentage of all tweets about cryptocurrencies today were about Solana?”). High dominance often accompanies FOMO.

How to use it? Look for discrepancies (divergences). For example:

The price is rising, but positive sentiment on social media is declining? This may be a sign of waning interest despite the price increase — be careful!

The price is falling, but negative sentiment is not intensifying or is even declining? Perhaps the panic is subsiding and the asset is ready to rebound.

A sudden, very strong surge in positive sentiment against the backdrop of important news — a short-term “pump” is possible, but be prepared for a quick correction (as in the example with FLOW in 2021, but based on current data).

For beginners: Imagine that The TIE is a huge microphone above all crypto conversations on the internet. It not only hears the volume (how much people are talking), but also the mood of the speakers (whether they are happy or angry). Sudden changes in this “crowd noise” can hint at where the price may go.

LunarCrush (https://lunarcrush.com/):

• What is it? A powerful platform that analyzes activity and sentiment on social media for thousands of crypto assets. Known for its unique indices.

Current metrics (2025):

• Galaxy Score: The main focus for finding ideas! Rated from 0 to 100. Not just popularity! Galaxy Score attempts to identify abnormally high social activity and positive sentiment regarding recent prices and overall market conditions. A high Galaxy Score (especially >75) says, “There is a lot of positive talk about this asset, and it stands out from the crowd, possibly not yet reflected in the price.” This is an indicator of potential interest before a big move.
• AltRank: Ranks all altcoins from 1 (best) to 3000+ (worst) based on a combination of market data (trading volume on major exchanges, price changes) and social data (volume and activity of discussions). A low AltRank (e.g., in the top 50) is a sign of strong current interest and activity. But be careful: the asset may be at the top due to a recent price surge (FOMO) that has already ended.

How to use it?

• Searching for ideas: Screening for a high Galaxy Score (>70-75) is a way to find assets that are starting to be actively and positively discussed before they skyrocket. Always check the fundamental reasons! What are people saying? Why?
• Assessing the hype: High AltRank + High Social Activity + Sharp price increase = Possible FOMO peak. Be careful when entering.
• Tracking leaders: Who is consistently at the top of AltRank? These are the current market favorites.
• For beginners: LunarCrush is like a radar. Galaxy Score tries to find “quiet” candidates who are about to make a loud statement (show price growth). AltRank shows who is currently the most popular and active on the crypto market dance floor. Remember, the most popular is not always the one who will dance the longest!

Santiment (https://santiment.net/):

• What’s it? A powerful platform that combines social data (sentiment, activity), on-chain data (what happens inside blockchains – money movements, address activity) and market data (prices, volumes). This is a “Swiss knife” for analysis.

Current opportunities (2025):

• Sanbase (Interactive Graphs): The main tool. You can overlay dozens of different metrics on the price chart. For example:
• Social Volume: How many times per day is an asset mentioned in key sources? Volume peaks often coincide with important events or FOMO/FUD peaks.
• Sentiment: The average tone of mentions (positive / negative).
• Developer Activity: How much work is being done on the project? (Important for assessing long-term potential).
• Large Transactions (Whale Transactions): Tracking large movements of funds between wallets and exchanges. It can signal the actions of whales (accumulation/distribution).
• Average age of coins (MVRV, SOPR): Complex on-chain metrics that show whether investors are holding in profit or loss, how “old” coins are moving. They help to determine overbought/oversold conditions.
• Keywords: An analogue of Google Trends within the crypto community. You can track spikes in mentions of specific words (“airdrop”, “partnership”, “hacking”).

How to use it?

Looking for divergences (the main thing!): Is the price rising and the social volume falling? Is the price falling, and large investors (according to on-chain data) are buying up? Is the price at its peak, and is MVRV showing strong overbought conditions? Such discrepancies are strong signals for caution or the search for reversal points.

• Trend confirmation: Is the price increase accompanied by an increase in social volume and positive mood? This confirms the strength of the movement.
• Detection of manipulation: A sudden surge in positive mentions on a little-known project + a sharp rise in price + lack of real news = possible “pump”.
• For beginners: Santiment is like a super dashboard for a crypto spaceship. It shows not only the speed (price), but also the fuel (network activity), the mood of the crew (social media), the actions of the captains of other ships (whales). Learning to see the connection between these indicators is the key to better piloting.

Dune Analytics (https://dune.com/):

• What’s it? It’s not exactly a classic sentiment analysis tool, but it’s an incredibly powerful platform for analyzing data from blockchain (on-chain data) and DeFi. Allows you to create and view custom dashboards.
• How does it work? Talented analysts write queries (in SQL) to blockchain data and create understandable visualizations: how many coins are being moved to exchanges (possible preparation for sale)? How many new addresses have appeared? How do balances on large wallets (“whales”) change? What are the volumes in DeFi protocols?

How to use it to understand the mood (2025)?

• Exchange Flows: A large influx of coins to exchanges (especially after a price increase) often signals an intention to sell (the arrival is fixed). A large outflow from the exchanges indicates the intention to hold long–term (HODL). Sudden inflows may precede selling pressure.
• Network activity: An increase in the number of new unique addresses making transactions is a sign of an influx of new users (often positive). A sharp decline is a possible cooling of interest.
• DeFi metrics: Total amount of funds Blocked (TVL), trading volumes in decentralized exchanges (DEX), lending/loan activity. Growth is a sign of trust and activity in the ecosystem, while decline is a possible outflow of capital or fear.
• Whale Actions: Tracking large transactions (especially from/to exchanges or between wallets) can provide insight into the intentions of the largest players.
• For beginners: Dune is like an X–ray or a lie detector for a blockchain. It shows what people are really doing with their coins (transferring, selling, blocking in DeFi), and not just what they say on social media. The combination of “words” (social media) and “deeds” (online) gives the most complete picture.

Now, looking at the picture above you can see that it’s not perfect by any means. However, as with every form of analysis you can’t rely on just one. It can’t be denied that this indicator does have a way of indicating certain price movements and when you take a closer look you might recognize that often the sentiment turns negative before the price starts falling. This can partly be explained by the previously mentioned newbies piling into the market at the top.

Workshop: How To Apply All This Right Now (May 2025)?

Understanding is good, but application is better. Here is a step-by-step approach on how to use this knowledge.:

Be Aware of Your Emotion: Before any trade (especially an impulsive one!) Ask yourself:

“How do I feel now? Excitement? Greed (‘Will I have time to buy before takeoff?’)? Fear (‘We need to sell urgently, before it falls more!’)? Envy (‘Everyone makes money on this memcoin, but I don’t!’)?”

The “Stop Emotion” algorithm: If you feel a strong impulse to buy/sell right now, take 10 deep breaths. Step away from the screen for 15 minutes. Then come back and assess the situation with a cool head.

Check The “Pulse Of The Market”:

Take a look at the Fear and Greed Index: What is the general atmosphere? Extreme values? How is the trend changing?

Take a look at Google Trends for keywords (“Bitcoin”, “Ethereum”, the name of your asset): Is there excitement (FOMO) or complete indifference (apathy/fear)?

Social Media and Data Analysis (Select 1-2 tools):

The TIE / LunarCRUSH Galaxy Score: Is there an abnormally high positive sentiment about the price? (Galaxy Score >75). Or vice versa – a strong negative on the background of the fall? Look for price divergences!

Santiment / Dune: What does on-chain data say? Do people buy up “on the downside” (outflow from exchanges, accumulation)? Or are they panicking and carrying it for sale (influx to stock exchanges)? What are the whales doing? Are there discrepancies between price and social/on-chain activity?

Compare it with Technical and Fundamental Analysis:

Do the charts (support/resistance, trends) confirm your idea?

Is there any real news (partnerships, product updates, regulatory decisions) explaining price movements and sentiment? Or is it just noise and FOMO/FUD?

Make an Informed Decision: Based on a comprehensive picture (emotions under control + data), decide whether to buy, sell, hold or wait.

How Emotions Work in Your Body (Just about The Complicated Stuff):

How Emotions Work in Your Body (Just about The Complicated Stuff):
When you see a sharp price spike or a frightening headline, your brain triggers a cascade of reactions.:

• Amygdala: Your internal “threat detector” or “opportunity detector” is triggered instantly. He shouts, “Danger! Run!” or “Luck! Grab it!”
• Hormones: Adrenaline (fear, excitement) or dopamine (anticipation of reward, pleasure from purchase /growth) are released.
• Prefrontal Cortex: This is your “rational boss.” But under the pressure of emotions and hormones, his signals are muffled or delayed. That’s why you’re acting on impulse!
• Tip: Train your prefrontal cortex! Meditation, deep breathing, following a pre-written investment plan (don’t deviate!) – all this helps to give rational thinking time to turn on and outweigh the emotional impulse.

Conclusion: You Are Stronger Than Your Emotions

Yes, we are predictable. Yes, emotions are a powerful force driving markets. But the key word is “manage”. You don’t have to be a puppet of your fear or greed.

1. Acknowledge your humanity: It is normal to experience FOMO, fear, or euphoria. Don’t beat yourself up.
2. Watch yourself: Learn to seize the moment when emotions take over. Use the “stop emotion” techniques.
3. Use data, not instincts: Sentiment analysis and on-chain data analysis tools of 2025 are your radar and shield. They help you see what’s really going on through the noise of emotions (both your own and others’).
4. Think strategically: Have an investment plan (which assets, why, for how long, when to buy/sell) and stick to it. Emotions are bad advisers for tactics.
5. Look at the future: Is a 20% drop a disaster or an opportunity to buy cheaper in a long–term trend? Is the frenzied growth of memcoin a chance to get rich or a trap for the last buyers? The answer depends on your strategy and analysis, not on a momentary feeling.

The goal is not to become an insensitive robot. The goal is to understand your emotions, understand the emotions of the crowd, and use this understanding to make smart, informed decisions that bring you closer to your financial goals, rather than the classic “bought at the peak, sold at the bottom” scenario. In 2025, you have more tools than ever to do this. Use them wisely!