Surprise Bitcoin Selloff Causes Extreme Greed To Taper
16 Noviembre 2021 - 10:09AM
NEWSBTC
Blood has been shed as Bitcoin dropped below $60,000 once again and
hints at more downside. The first crypto by market cap trades at
$60,800, as of press time, with a 5% loss in the daily chart.
Although it has seemed some recovery, Bitcoin registers a
correction of around 12% from its all-time high as an increase in
selling pressure caused the entire crypto market to take a dive.
Related Reading | Bitcoin Bears Are Back, Why BTC Could Even Dive
Below $60K The general sentiment in the market has flipped from
extreme greed to normal greed levels, according to data from Arcane
Research. Despite the correction, traders and operators remain
optimistic about potential new highs. This metric could continue to
fall as Bitcoin moves at the low of a range between $58,000 to
around $70,000 and the market reset. The derivatives sector is
likely to be the most affected. As NewsBTC reported, Bitcoin
futures contracts across the board got overheated as BTC’s price
pushed into uncharted territory. This created a lot of liquidity at
the lows and a rise in funding rates. In other words, a lot of
traders took over-leveraged long positions expecting more upside,
but large investors drove the price below $59,000 to take advantage
of the liquidity and fill their orders. Post-crash, funding rates
have returned to neutral territory in almost every crypto exchange
platform. Along with the market sentiment provided by Arcane
Research, and the fact that the price of Bitcoin held at $58,6000,
this suggests a potential bottom has formed, at least for the short
term. Data provided by CryptoQuant records over $33 million long
liquidations in one hour as BTC’s price went below its current
levels. The Open Interest (OI) decreased by 2.33% in the past day
or about $350 million. Additional data provided by Glassnode
indicates that the OI for Bitcoin Futures contracts has reached a
5-month low of $711,951,837 on crypto exchange Bitmex. As seen
below, a dropped in OI during September and October was preceded by
more BTC appreciation. 📉 #Bitcoin $BTC Futures Open Interest just
reached a 5-month low of $711,951,837.33 on #Bitmex Previous
5-month low of $713,112,500 was observed on 24 September 2021 View
metric:https://t.co/GyObF5WOjC pic.twitter.com/bsa9S166ZP —
glassnode alerts (@glassnodealerts) November 16, 2021 Bloodbath
Over, Bitcoin Ready To Moon? However, Bitcoin whales could try to
push the price down one more time to leverage the liquidity
concentrated around $57,700, according to data from monitor
Whalemap. In addition, the apparent indirect correlation between
BTC’s price and the U.S. Dollar (DXY Index) could create more
hurdles for the bulls. The dollar recently broke above a major
resistance zone and stands at a 16-month high. This rally could
have been triggered by macro-economic factors, including the start
of tapering by the U.S. FED and the increased risk in the Asian
markets due to the Evergrande crisis. Related Reading | Bulls
Giving Up? Massive Bitcoin Bid Wall Removed, What It Could Mean For
BTC The above adds to an already uncertain market. One thing seems
true, BTC’s price must hold at $58,000 if it wants to return to
price discovery in Q4, 2021.
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