Bitcoin sentiment in ‘wild’ divergence from reality as $53K BTC triggers ‘extreme fear’

Bitcoin (BTC), which dropped by $6,000 in one day, has stabilised at $55,000. However, crypto market sentiment remains in shock.

According to the Crypto Fear & Greed Index, Nov. 27, emotions have been at their most fearful since September.

Crypto sentiment plunges into “extreme Fear”

Fear & Greed is a method that uses a variety of factors to calculate a standard sentiment score for crypto market from 1-100. At the moment, it sits at 21.

Friday was a rough day for the metric. The score fell more than half in 24 hours, compared to its previous position at 47.

These two readings indicate that sentiment is shifting from “neutral” to “extreme fear”, but they miss the “fear zone.”

Crypto Fear & Greed Index. Source: Alternative.me

Although it was expected, some familiar faces find the market turmoil amusing.

Alistair Milne, an investor and entrepreneur, noted that “extreme Fear” is not a suitable reaction to BTC/USD trading around $54,000. In fact, the Bitcoin spot price was last at these levels in October. Fear & Greed measured 78. This territory is also known as “extreme greed”.

“This much fear, and we’re at $54k. He summarized the situation as “wild.”

When the Index hit 21/100 on September 30, BTC/USD traded for $43,800 at Bitstamp.

BTC/USD 1-day candle chart (Bitstamp). Source: TradingView

Overnight reset of funding rates

Cointelegraph reported that the most severe phase of the BTC price decline was when traders on the exchanges continued to be curiously optimistic.

Despite Friday’s move on Friday, funding rates were positive and showed that the market was expecting a quick recovery.

Related: Bitcoin reverses bear market at $53.5K, as Pfizer gains from new panic over coronavirus variant ‘Nu’

However, at the time of writing it appears that the plunge to $53,500 lows was enough to reset the mood. Funding rates are now back to normal, and there is no bullish bias.

Chart of Bitcoin funding rates. Source: Coinglass

However, as Delphi Digital, an analytics firm, noted this week, funding is still lower than the first half 2021, which could indicate a lackluster overall direction.

“Funding rates remain low on futures markets. Researchers told Twitter followers that this could indicate that short-term leveraged traders remain uncertain about their direction.

“Looking back on the beginning of the year, we can see that the bullish run up was accompanied by an even higher funding rate.”
https://cointelegraph.com/news/bitcoin-sentiment-in-wild-divergence-from-reality-as-53k-btc-triggers-extreme-fear

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Donna Burk

Donna Burk– Business News My Name is Donna Burk and I am also the main source from the ‘Dailynewssheet.com’ of all the exclusive and most delicate visualization of the activities in the business sector. My first step towards this journey was taken in the very early years of my life. I started with an independent financial consultant. However, I only had almost 4 years of skills and experience in this market. I have always been a free personality and like to fly one place to another, to explore more and more. Moreover, this passion and craze of traveling gave me a chance to report a section for best news associations. Last but not least, I am presently working full-time as an editor.

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