Hi.. also this topic was discussed last spring in detail here

For one, this "Bitfinex Sentiment Index" is deliberately crafted in a way to give an rough indication,
but without being able to derive precise numbers (which could reveal internal data which was at that
time deemed dangerous).

But beyond that, the "Sentiment Index" always reflects the current sentiment of the people doing margin
trading on Bitfinex. Of course this can change in a very short time span.


Such can happen, and will happen regularly. The tricky part now is how to proceed.
Basically you have two options: jump on the rolling trend, to get at least part of a market movement, or just let that opportunity pass and use the next opportunity.

Please note, there is no mechanical solution to answer this question. Especially please don't think "Technical Analysis" can answer you this question. (TA gives you only tools to see some trends, not to judge them). You need to rely on your own judgement as a trader -- and exactly this is what differentiates between traders and portfolio managers likewise. The "better" traders/portfolio managers are better in judging the situation, and thus are profitable above the average; the lesser traders are profitable below average and thus are the source of the formers profits.