Bitcoin failed to hit a new historical high this week, with the price dropping from 73,000 yuan to around 69,000 yuan. In addition, the cryptocurrency management company Galaxy Digital transferred $100 million worth of Bitcoin to the Binance exchange today. Does this indicate a potential market sentiment reversal?
After Bitcoin failed to reach a new high this week, the price dropped from 73,000 yuan to around 69,000 yuan last night. Perhaps sensing a change in market sentiment, the cryptocurrency management company Galaxy Digital chose to transfer some of its BTC holdings to the Binance exchange today.
According to data analysis platform Arkham, Galaxy Digital transferred 1,450 Bitcoins (worth about $100 million) to Binance about 5 hours ago, seemingly preparing for a sale. Does the institution’s suspected sale of Bitcoin imply a change in market sentiment?
According to Coindesk, this Bitcoin pullback has led to a decline in the overall cryptocurrency market, potentially signaling an upcoming reversal in market sentiment.
The article goes on to state that the “Fear and Greed Index,” an indicator of market sentiment and volatility, reached “extreme greed” levels yesterday, which is typically a signal of a market top. As of today, the index still shows “greed,” suggesting that prices may need to adjust further.
The Fear and Greed Index is designed to measure market sentiment reactions: extreme fear may indicate buying opportunities, while extreme greed suggests a market correction may be imminent.
The recent decline has also caused significant losses for contract traders. According to Coinglass data, the total amount of liquidated positions in the past 24 hours reached $285 million, with long liquidations amounting to $253 million, and a total of 93,400 people being liquidated. The article suggests that when large-scale liquidations occur, it may signal a market turning point, as market reactions are excessive, and prices may reverse.
It is worth noting that before this decline, the total open positions in Bitcoin futures contracts across the network reached a historical high. When open interest is high, it is usually a signal of a market top for the coin price.
On the other hand, not only has the cryptocurrency market shown a downward trend recently, but the four major U.S. stock indices have also weakened. Since October 30th, the S&P500 index has fallen by 2.5%, the Nasdaq index by 3.6%, the Philadelphia Semiconductor index by 7.6%, and the Dow Jones Industrial index by 1.6%. Additionally, Japanese, Korean, and Taiwanese stocks have also experienced the same downward trend.
The author believes that due to the upcoming U.S. presidential election (only 4 days left), with the candidates’ polling numbers close, it is more difficult for the market to predict who will govern the United States in the future, increasing uncertainty in the stock market. Therefore, many investors may sell off their positions in advance, wait on the sidelines, and avoid the uncertainty risk brought about by the election.