analyzing-market-sentiment

# Analyzing Market Sentiment

## Overview

This skill provides comprehensive cryptocurrency market sentiment analysis by combining multiple data sources:

- **Fear & Greed Index**: Market-wide sentiment from Alternative.me
- **News Sentiment**: Keyword-based analysis of recent crypto news
- **Market Momentum**: Price and volume trends from CoinGecko

**Key Capabilities:**
- Composite sentiment score (0-100) with classification
- Coin-specific sentiment analysis
- Detailed breakdown of sentiment components
- Multiple output formats (table, JSON, CSV)

## Prerequisites

Before using this skill, ensure:

1. **Python 3.8+** is installed
2. **requests** library is available: `pip install requests`
3. Internet connectivity for API access (Alternative.me, CoinGecko)
4. Optional: `crypto-news-aggregator` skill for enhanced news analysis

## Instructions

### Step 1: Assess User Intent

Determine what sentiment analysis the user needs:
- **Overall market**: No specific coin, general sentiment
- **Coin-specific**: Extract coin symbol (BTC, ETH, etc.)
- **Quick vs detailed**: Quick score or full breakdown

### Step 2: Execute Sentiment Analysis

Run the sentiment analyzer with appropriate options:

```bash
# Quick sentiment check (default)
python {baseDir}/scripts/sentiment_analyzer.py

# Coin-specific sentiment
python {baseDir}/scripts/sentiment_analyzer.py --coin BTC

# Detailed analysis with component breakdown
python {baseDir}/scripts/sentiment_analyzer.py --detailed

# Export to JSON
python {baseDir}/scripts/sentiment_analyzer.py --format json --output sentiment.json

# Custom time period
python {baseDir}/scripts/sentiment_analyzer.py --period 7d --detailed
```

### Step 3: Present Results

Format and present the sentiment analysis:
- Show composite score and classification
- Explain what the sentiment means
- Highlight any extreme readings
- For detailed mode, show component breakdown

### Command-Line Options

| Option | Description | Default |
|--------|-------------|---------|
| `--coin` | Analyze specific coin (BTC, ETH, etc.) | All market |
| `--period` | Time period (1h, 4h, 24h, 7d) | 24h |
| `--detailed` | Show full component breakdown | false |
| `--format` | Output format (table, json, csv) | table |
| `--output` | Output file path | stdout |
| `--weights` | Custom weights (e.g., "news:0.5,fng:0.3,momentum:0.2") | Default |
| `--verbose` | Enable verbose output | false |

### Sentiment Classifications

| Score Range | Classification | Description |
|-------------|----------------|-------------|
| 0-20 | Extreme Fear | Market panic, potential bottom |
| 21-40 | Fear | Cautious sentiment, bearish |
| 41-60 | Neutral | Balanced, no strong bias |
| 61-80 | Greed | Optimistic, bullish sentiment |
| 81-100 | Extreme Greed | Euphoria, potential top |

## Output

### Table Format (Default)
```
==============================================================================
  MARKET SENTIMENT ANALYZER                         Updated: 2026-01-14 15:30
==============================================================================

  COMPOSITE SENTIMENT
------------------------------------------------------------------------------
  Score: 65.5 / 100                         Classification: GREED

  Component Breakdown:
  - Fear & Greed Index:  72.0  (weight: 40%)  → 28.8 pts
  - News Sentiment:      58.5  (weight: 40%)  → 23.4 pts
  - Market Momentum:     66.5  (weight: 20%)  → 13.3 pts

  Interpretation: Market is moderately greedy. Consider taking profits or
  reducing position sizes. Watch for reversal signals.

==============================================================================
```

### JSON Format
```json
{
  "composite_score": 65.5,
  "classification": "Greed",
  "components": {
    "fear_greed": {
      "score": 72,
      "classification": "Greed",
      "weight": 0.40,
      "contribution": 28.8
    },
    "news_sentiment": {
      "score": 58.5,
      "articles_analyzed": 25,
      "positive": 12,
      "negative": 5,
      "neutral": 8,
      "weight": 0.40,
      "contribution": 23.4
    },
    "market_momentum": {
      "score": 66.5,
      "btc_change_24h": 3.5,
      "weight": 0.20,
      "contribution": 13.3
    }
  },
  "meta": {
    "timestamp": "2026-01-14T15:30:00Z",
    "period": "24h"
  }
}
```

## Error Handling

See `{baseDir}/references/errors.md` for comprehensive error handling.

| Error | Cause | Solution |
|-------|-------|----------|
| Fear & Greed unavailable | API down | Uses cached value with warning |
| News fetch failed | Network issue | Reduces weight of news component |
| Invalid coin | Unknown symbol | Proceeds with market-wide analysis |

## Examples

See `{baseDir}/references/examples.md` for detailed examples.

### Quick Examples

```bash
# Quick market sentiment check
python {baseDir}/scripts/sentiment_analyzer.py

# Bitcoin-specific sentiment
python {baseDir}/scripts/sentiment_analyzer.py --coin BTC

# Detailed analysis
python {baseDir}/scripts/sentiment_analyzer.py --detailed

# Export for trading model
python {baseDir}/scripts/sentiment_analyzer.py --format json --output sentiment.json

# Custom weights (emphasize news)
python {baseDir}/scripts/sentiment_analyzer.py --weights "news:0.5,fng:0.3,momentum:0.2"

# Weekly sentiment comparison
python {baseDir}/scripts/sentiment_analyzer.py --period 7d --detailed
```

## Resources

- **Alternative.me Fear & Greed Index**: https://alternative.me/crypto/fear-and-greed-index/
- **CoinGecko API**: https://www.coingecko.com/en/api
- **Sentiment Analysis Theory**: Contrarian indicator - extreme readings often precede reversals
- See `{baseDir}/config/settings.yaml` for configuration options