Bitcoin failed to hit a new all-time high this week and the price dropped from 73,000 yuan to around 69,000 yuan. In addition, the cryptocurrency asset management company Galaxy Digital transferred $100 million worth of Bitcoin to the Binance exchange today. Does this mean that market sentiment is about to reverse?
After Bitcoin’s failure to hit a new high this week, the price dropped from $73,000 to around $69,000 last night. Perhaps sensing a shift in market sentiment, the cryptocurrency asset management company Galaxy Digital chose to transfer a portion of its BTC holdings to the Binance exchange today.
According to data analysis platform Arkham, Galaxy Digital marked address transferred 1450 Bitcoins (valued at approximately $100 million) to Binance 5 hours ago, seemingly preparing for a sale. Does the institutional sale of Bitcoin imply a shift in market sentiment?
Reported by Coindesk, this Bitcoin pullback led to a decline in the overall cryptocurrency market, possibly signaling an upcoming reversal in market sentiment.
The article goes on to state that the fear and greed index, which measures market sentiment and volatility, reached an “extreme greed” level yesterday, which is usually a signal of a market top. As of today, the index still shows a “greed” level, indicating that prices may still need to adjust.
The fear and greed index is designed to measure market sentiment: extreme fear may signal buying opportunities, while extreme greed suggests a market correction may be imminent.
The recent drop has also caused significant losses for contract traders. According to Coinglass data, the total liquidation volume in the past 24 hours reached $285 million, with long liquidation volume at $253 million, and a total of 93,400 people liquidated. The article suggests that when large-scale liquidation occurs, it may indicate a market turning point, as price reversals may occur due to market overreactions.
It is worth noting that before this drop, the total open positions in Bitcoin futures contracts across the network hit an all-time high. When open interest rises significantly, it is usually a sign of a market top.
On the other hand, not only the cryptocurrency market is showing a downward trend recently, but the four major US stock indices are also weakening. 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, the Japanese, Korean, and Taiwanese stock markets have also experienced similar downward trends.
The author believes that due to the upcoming US presidential election (only 4 days away) and the close gap in polls between the candidates, it is more difficult for the market to predict who will govern the future United States, increasing uncertainty in the stock market. Therefore, many investors may sell their positions in advance, adopt a wait-and-see approach, and avoid the uncertainty brought by the election.
