Bitcoin (BTC) stabilized at around $55,000 after dropping $6,000 in one day, but the crypto market sentiment is still shocked.
According to the Crypto Fear & Greed Index as of November 27, emotions are now the worst since the end of September.
Crypto centralization plunges into ‘extreme fear’
Fear and Greed, which requires a combination of factors to calculate the standard sentiment score for cryptocurrency markets from 1 to 100, is currently 21.
Friday affected the scale: Within 24 hours, the score was more than halved compared to the previous position of 47.
These two dimensions correspond to feelings that go from “neutrality” to “extreme fear” – to skip the “fear” zone altogether.
The Fear and Greed Index of Cryptography. Source: Alternative.me
This is an expected reaction, but it is clear that the emotional state of market participants has become a source of entertainment for some famous names.
Investor and entrepreneur Alistair Milne noted that “extreme fear” is unlikely to be an appropriate response to trading $54,000 BTC/USD. In fact, the last time the bitcoin spot price was at these levels was in mid-October, Fear & Greed 78 measured its “extreme” greed zone.
“There is a lot of fear, and we have $54,000. Wilde,” summed up.
On September 30, when the index last reached 21/100, BTC/USD was trading at around $43,800 on Bitstamp.
BTC/USD 1-day light chart (bit print). Source: TradingView
Funding interest rates are expected to fall overnight
As Cointelegraph reported, the latest and deepest stage of Bitcoin’s price correction came when exchanges’ trading habits remained oddly optimistic.
Funding rates, which were positive despite Friday’s move, showed that market expectations are improving rapidly.
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However, at the time of writing on Saturday, a trip to $53,500 seemed to be enough to shake the mood – funding rates are now back to normal, not bullish.
Bitcoin finance price chart. Source: Coinglass
However, as research firm Delphi Digital noted this week, funding is still lower compared to the first half of 2021, and this may indicate a lack of direction.
Funding rates in the futures markets are still low. This could be a sign that short-term traders are still uncertain,” the researchers told Twitter followers.
“Looking at the start of the year, the bullish run was accompanied by a significantly higher funding rate.”