Investor Sentiment Gauge

Definition ∞ Investor sentiment gauge refers to a metric or analysis used to assess the prevailing mood or collective attitude of market participants towards a specific digital asset or the broader cryptocurrency market. This gauge can incorporate various data points, including social media trends, trading volumes, and on-chain activity, to quantify optimism or pessimism. It provides a snapshot of market psychology.
Context ∞ Crypto news frequently cites investor sentiment gauges, such as the Crypto Fear and Greed Index, to explain market behavior and predict potential price shifts. A strong bullish sentiment might suggest overextension, while extreme fear could signal a buying opportunity. These gauges offer crucial context for understanding the emotional drivers behind market movements.