Abstarct: In recent years, the cryptocurrency market has emerged as a dynamic and evolving investment arena, attracting increasing attention from researchers and financial practitioners. This market is characterized by high volatility, nonlinear behaviors, and rapid reactions to public sentiment. Given the significant role of behavioral factors in price dynamics, investor sentiment analysis has been introduced as a novel approach in financial research. This study investigates the relationship between investor sentiment and cryptocurrency market volatility, with a particular focus on the Fear and Greed Index. Using daily data from six major cryptocurrencies over a defined period, the research employs statistical indicators, analysis of variance tests, intergroup comparisons, and econometric models to evaluate the impact of different sentiment levels on returns, prices, and market liquidity. Furthermore, advanced statistical modeling techniques are utilized to provide a deeper understanding of the market’s emotional responses. The findings reveal that investor sentiment—especially during extreme levels of greed or fear—can lead to significant changes in volatility structures, returns, and trading behavior within cryptocurrency markets.