Study Tests Whether Bitcoin Fear/Greed Index Predicts Trader PnL on Hyperliquid

A data analyst examined thousands of trades on Hyperliquid, a perpetual-futures decentralized exchange, to test whether the Bitcoin Fear/Greed Index correlates with trader performance. Each trade was tagged with the prevailing daily sentiment category — Extreme Fear, Fear, Neutral, Greed, or Extreme Greed — and average profit/loss was compared across groups. Extreme Fear days produced the highest average PnL at $338.92, roughly five times that of Extreme Greed days ($65.94), though their win rate was also the lowest at 32.3%, suggesting a high-risk, high-reward tail profile during panic-driven markets. Extreme Greed days fared worst on both measures, with an 11.5% win rate and the lowest average returns, consistent with euphoria-driven overtrading. Neutral sentiment days stood out for reliability, posting the highest win rate of 54.3% alongside steady mid-range returns.
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