Market Sentiment Index (MSI)

Understanding Market Sentiment Index

What is MSI?

Market Sentiment Index provides daily automated momentum analysis by tracking what percentage of the top 200 cryptocurrencies are trading higher than they were 7, 30, 90, and 180 days ago. Using data from our ATH/ATL automation system with 99% coverage (196-198 coins analyzed daily), MSI creates a weighted composite score that reveals market breadth and directional strength for mean reversion strategies and sentiment analysis across multiple timeframes.

Momentum Calculation Methodology

MSI calculates the percentage of coins trading higher than their price 7, 30, 90, and 180 days ago, then combines these percentages using customizable weights. For example, if 75% of coins are up over 7 days and 60% are up over 30 days, these percentages are weighted and combined into a single MSI score. The system uses the actual top 200 coins that existed at each point in time, not today's top 200 applied backwards, ensuring authentic historical market analysis.

Market Sentiment Interpretation

MSI values above 80 typically indicate extreme momentum and potential market euphoria, while readings below 20 suggest weak momentum and potential accumulation opportunities. The indicator excels at identifying market cycle phases through breadth analysis - when most cryptocurrencies move in the same direction across multiple timeframes, it signals strong directional consensus. This makes MSI particularly valuable for mean reversion strategies and market timing.

Customizable Weighting System

The weighting system allows adaptation to different market conditions and trading styles. Fast presets emphasize short-term momentum (60% weight on 7-day), while slow presets focus on longer-term trends (higher weights on 90d and 180d timeframes). Individual timeframe selections (100% weight on single period) provide pure momentum readings, while custom weights enable fine-tuned analysis based on current market regime and personal trading approach.