November chaos worries owners

With an average loss of 6% and a 10% correction in the weekly chart of Bitcoin, ADA, XRP and others, the crypto market has seen a lot of volatility in the past few days. The unrest has affected sentiment, forcing traders to prepare for further downward moves.

Bitcoin price 4-hour chart | The source: Trade view

According to data from Arcane Research, the fear and greed index quickly switched from “Greed” to “Fear” as Bitcoin and other major cryptocurrencies in the top 10 by market capitalization retest support levels.

Fear and Greed Index | Source: Arcane Research

Bitcoin had a particularly bad week in terms of performance as the increased volatility left the price hovering between $ 55,400 and $ 60,000. ETH, on the other hand, shows more strength, as it was able to quickly recover from the lows and into the middle range around the current level.

As Arcane Research has noted, market sentiment is still far from its peak. Despite easing pressure, fundamentals remain cheap as most coins successfully retested their monthly lows.

“… During the bull market, the fear and greed index shows long-term“ greed ”or“ extreme greed ”with periodic“ fear ”retracements in the short term, like this spring. Therefore, a “fear” level is not necessarily a signal that the current bull market is over … “.

Why did the crypto market keep falling before a new ATH?

In the short term, we will have a very different picture for Bitcoin and the rest of the crypto market. The US Dollar Index (DXY) shows strength when the crypto market is trending down.

However, as analyst Justin Bennett pointed out, shown, the dollar may have peaked locally. Accordingly, the cryptocurrency will have a slight lead and return to previous highs or break key resistance levels.

Daily DXY index chart | The source: Justin Bennett

However, traders still need to be careful. Although the crypto market has pulled back, the derivatives sectors are still showing signs of overheating, with most exchanges finding the neutral funding rate quickly turning positive and rising.

As a result, Jarvis Labs believes that Bitcoin and the crypto market will return to pricing if the funding rate turns negative, as it did in September 2021. This process can reduce the fear and greed index from fear levels to extreme fear.

#BTC Binance’s funding rate is still hovering around neutral levels. It is best to wait a few days with a negative funding regime, as it did at the end of September, before making a valuation. pic.twitter.com/AJ5bKDr29k

– JarvisLabs (@Jarvis_Labs_LLC) November 23, 2021

“The BTC funding rate on Binance is still hovering around neutral levels. Best to wait financing like at the end of September negative for a few days and then expand ”.

Based on this note, the dealer has Rekt Capital believe Bitcoin shows almost no signs of strength. Another drop could send the entire market down along with BTC.

“Let’s see how the price closes every day, as investors are scared at the moment. A mishap that happens from here will definitely frighten you extremely…. Greed raises prices. Fear makes prices fall. Extreme greed signals a climax. Extreme fear signals the ground. Bitcoin will likely have to be extremely scared before bottoming out and reversing. “

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