Crypto Market Shows ‘Extreme Greed’; Analysts Warn of Potential Deleveraging Before $100K Bitcoin

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Crypto Market Shows ‘Extreme Greed’; Analysts Warn of Potential Deleveraging Before $100K Bitcoin

This comes as the cryptocurrency market was found to be in an ‘Extreme Greed’ zone, with some economic governance representatives of the Bitcoin industry advising that there could be ‘correction’ before Bitcoin hits the $100,000 expected high.

Manually collected data from the Crypto Fear & Greed Index reveals that investor sentiment hit its highest level of 80 on November 12, following Bitcoin’s move to a new all-time high of over $85,000 on November 11. This is the first time since the index hit the region in April.

In the past, the figure of 80 may indicate that the cooling-off period is due. The last time the Crypto Fear & Greed Index was this low was in April 2023, before Bitcoin dropped by as much as 18% within the next three weeks. According to Bitstamp, at that time, Bitcoin’s price dropped from over $69,000 to $56,500 by early May.

Still, many analysts are optimistic about the cryptocurrency’s longer-term prospects, with most forecasting strongly positive returns going into 2025. Bitcoin neared $90,000 on November 12 after a robust weekly advance that helped its market value rise more than $413 billion in a week.

Crypto Leverage and Market Sentiment Signal Potential Volatility for Bitcoin

The other sign of market overheating was that Kris Marszalek, co-founder and CEO of Crypto.com, noted increased leveraged trading levels. November 12, Marszalek tweeted, through X, an updated warning for investors that the leverage ratio in crypto markets is now excessive to experience volatility or something to that effect. From the chart compiled by CryptoQuant, the leverage ratio of Bitcoin across all exchanges has reached 0.217, the highest since October 2023.

That said, analysts think Bitcoin may continue upward due to the fundamental change in macroeconomic fundamentals. Shunyet Jan, an ex-Pantera Derivatives head who is currently the head of derivatives at Bybit, joined in the chorus and predicted that the perception of the policies that were expected to emerge in the wake of Donald Trump’s recent presidential victory could further endorse the Bitcoin token’s ability to climb up to and surpass the $100,000 barrier before the end of the year.

Some analysts have claimed that deleveraging is expected to happen but may act more as a catalyst to Bitcoin’s continuation rally. As it has been seen the market shifts its gear up into over sentiment and leverage, traders have to remain alert for volatility that might act as tipping point for Bitcoin Price.

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