How to Use Sentiment Indicators? Essential FUD/FOMO Strategies for Crypto Beginners

Many people think they can make money just by looking at candlestick charts, but they actually overlook one thing—the market mentality. The craziest part of the crypto world is this: a single piece of negative news can crash the market, and a tweet from a major influencer can trigger a surge.

What are FUD and FOMO?

FUD is about creating panic to make you sell at a loss, while FOMO makes you chase the top and buy in at high prices. Combined, these two tricks turn retail investors into “chives” (easy prey). News, social media, and KOLs are all playing this psychological game.

How to deal with it? Use these tools:

On-chain funding rates — Look at the long-short ratio in futures; high funding rates indicate that longs are in FOMO, which is often a contrarian signal

Fear & Greed Index — Ranges from 0 to 100. Over 80 (extreme greed) is a sell signal, below 20 (extreme fear) is a buy signal. Simple, direct, and very useful

X/social media sentiment — Tools like Santiment can track the intensity of comments; a surge in negative remarks is often a bottom signal

On-chain data — Check exchange balances, wallet addresses, and whale movements; this is much more reliable than sentiment

Core logic: Following the crowd is risky, contrarian moves make money. The more people say a coin is about to moon, the more cautious you should be; the more people panic sell, the more you should look for bottom signals. Emotion is the bait, data is the truth.