Bitcoin (BTC) started the second week of November at $35,160, still holding steadfast near its highest levels in 18 months. This remarkable resilience comes against the backdrop of a significant shift in Bitcoin holder sentiment, shaping the current BTC price action.
Despite selling pressure, the largest cryptocurrency has secured another impressive weekly close. The analysis suggests that this change in sentiment extends to both Bitcoin and altcoins, which have steadfastly held onto gains accrued over the past month.
Amidst a challenging macroeconomic environment where traditional assets like stocks are under pressure, cryptocurrency seems to be charting its course. Bulls are cautiously optimistic that the upside potential has not been exhausted, even as a fierce battle between buyers and sellers unfolds, making it challenging to overcome current resistance levels.
Liquidations also piled up as a testament to the ongoing market volatility. The hourly chart, as observed by prominent trader Skew, indicates that “both sides of the book were swept” on exchanges.
On November 5, Skew noted a surge in open interest (OI) on the world’s largest crypto exchange, Binance, often a precursor to heightened volatility.
Bitcoin Closes at 18-Month High: Brief Dip Amid Volatility
In line with last week’s performance, Bitcoin didn’t disappoint with its weekly candle close on November 6. Closing at just over $35,000, it marked a new 18-month high, preceding a brief period of volatility with a momentary dip below the $36,000 mark, as per data from TradingView.
Furthermore, Glassnode data reveals that aggregate capital inflows have reached year-to-date highs, a development that has been lauded by prominent social media trader and analyst Ali as a sign of “strong investor confidence.”
However, the improved sentiment in the crypto space often carries a caveat, as it signals a growing focus on profitability among average holders. This sentiment shift is mirrored by the Crypto Fear & Greed Index, a widely-used market sentiment gauge that raises a cautionary flag during phases of irrational exuberance.
During Bitcoin’s ascent to current all-time highs in November 2021, the Fear & Greed Index hit 84/100. As of November 6, it stands at 74/100, suggesting that the market is even “greedier” than at any point in the past two years. Nonetheless, for Crypto Tony and other analysts, there is still room for further upside before the sentiment imbalance becomes too conspicuous to ignore.