The Bitcoin (BTC) course caught its breath last week. Nevertheless, sentiment in the market is ‚extremely greedy‘.
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Bitcoin course and sentiment
The story is well known. On 5 October the price was still at $10,600, but at the time of writing the price is proudly above $19,000.
Monday November 30th the cryptomint wrote history Bitcoin Bank with a price of $19,918 on the Bitstamp chart. With which the illustrious previous record of $19,666 from 2017 can be broken by the shredder.
Subsequently, he was unable to push through the psychological limit of $20,000, which made his starting position worse.
A deep correction below $18,000 did not occur this week anyway. The fact that the price did not fall through his hooves after the earlier impressive sprint is something the investor can hold on to next week. Staying above $19,000 is the motto. As soon as the currency lays down support levels there, that provides a solid bottom for levels above $20,000.
Confidence in the largest crypto currency also remains strong for the time being, according to the Fear & Greed Index. This is a composite index to gauge sentiment about the exchange rate. It is an indication of the market, nothing more.
Alternative.me postpones the index together:
price fluctuations (volatility)
bitcoin market dominance
Market sentiment (Google Trends, social media, surveys)
The current score is ’95‘, an almost maximum score of greed. In the past month the score is also stiff above ’80‘.
This can be explained as a positive signal (or resultant) from the bull market, but at the same time it is also dangerous. Pride comes before the fall. As soon as the market becomes overconfident and it becomes increasingly expensive to speculate on a higher (future) price, it can result in a deception.
Prudence is therefore called for, because Bitcoin is a young, relatively small asset (USD 354 billion) and market players have an interest in ensuring that the price does not rise too quickly. They want to be able to buy large quantities at a low (re)price.
As soon as opening a short position becomes more interesting (i.e. cheaper) because the rest of the market is overconfident, the tide may turn (as soon as others start to follow that strategy as well).
Bullish news continues to trickle in. The fact that a listed company such as MicroStrategy continues to make diligent purchases is a good sign. The cloud provider now has $765 million worth of Bitcoin on its balance sheet, which has proven to be a lucrative ‚gamble‘ so far.
Canadian hardware wallet manufacturer Coinkite has made a much cited list of listed companies with BTC on the balance sheet with bitcointreasuries.org. The counter stands at 21 companies and 3 private companies that together account for 881,953 Bitcoin, or 15.4 billion dollars.
This can be compared to the net turnover achieved by oil group Shell in 2019.
The price in euros:
Disclaimer: Bitcoin Magazine NL offers no financial advice. The articles are intended for educational purposes.