Originally published on: November 12, 2024
The cryptocurrency market is currently experiencing a period of extreme greed, signaling that a potential deleveraging may be on the horizon before Bitcoin reaches the coveted $100,000 mark. Industry leaders are urging caution as investor sentiment hits record highs.
According to the Crypto Fear & Greed Index from alternative.me, crypto investor sentiment reached 80 on Nov. 12, just a day after Bitcoin crossed the $85,000 milestone. This level of extreme greed has not been seen since April, when Bitcoin experienced an 18% correction over the following weeks.
Despite the warning signs of a potential correction, most analysts remain optimistic about Bitcoin’s future price trajectory. The leading cryptocurrency recently surged to nearly $90,000, marking its best weekly performance since the 2023 US banking crisis and adding over $413 billion to its market capitalization in just seven days.
However, concerns are mounting over the current leveraged ratios in the market, with Crypto.com’s CEO Kris Marszalek highlighting unsustainable levels of borrowed funds being used for trading positions. The estimated leverage ratio for Bitcoin across all exchanges has reached a high not seen since October 2023.
While caution is advised, some experts believe that Bitcoin’s price will continue to rise, especially in light of Donald Trump’s projected victory in the upcoming presidential election. Shunyet Jan, head of derivatives at Bybit, predicts that improved macroeconomic conditions under a Trump administration could drive Bitcoin’s price above the $100,000 mark by the end of the year.
As the crypto market navigates these uncertain waters, it’s crucial for investors to stay informed and make smart decisions. Stay updated on the latest developments in DeFi and cryptocurrency by subscribing to the Finance Redefined newsletter for valuable insights and analysis every Friday. Don’t miss out on new financial opportunities – subscribe now and make confident decisions in the ever-evolving world of finance.
