The cryptocurrency market remains in a state of fear, given the momentary loss of support above $40,000 for the price of bitcoin (BTC). Although this did not last more than a few hours between this Monday, April 11 and Tuesday, April 12, the expectation seems to remain bearish among market participants.
Now the top cryptocurrency is around $40,300 at the time of writing, but the fear and greed index available on alternative.me he is shown leaning toward “extreme fear.” A clear decline after the recent neutrality that we reported in CriptoNoticias.
For this measurement, aspects such as price volatility, BTC dominance in the market, Google search trends and even mentions on social networks are taken into account. That is, a broad picture that accounts for much of the market sentiment from various sides.
Index data shows that fear has been sustained over the past few weeks. But if we increase the range and position ourselves to see so far this year, the truth is that the market has never been optimistic or, as bullish sentiment in this index is defined: there has been no greed.
Alternative.me defines moments of extreme fear as a buying opportunity, while greed should in theory lead to further price corrections. However, the index has hovered between neutral and fearful as bitcoin remains below the price line where it started this year. It only managed to top it momentarily in recent weeks, only to drop back to current levels.
Over $400 million lost by traders
Before this drop, it seems, most investors had bullish expectations. At least that is indicated by the fact that, during the last 24 hours, the highest volume of liquidations to bullish traders has been generated since January of this year.
In futures markets, a long position is a bet that the asset will rise, while short positions are ones that anticipate a fall in price.
In this opportunity, Those who bet on the rise of the cryptocurrency lost a total of 428 million dollars in the different derivatives exchanges in that period. Liquidated long (up) positions correspond not only to BTC but to various cryptocurrencies, as shown in their records CoinGlass.
This makes sense since normally the major altcoins tend to move in the same direction as bitcoin. If it goes up or is expected to go up, the sentiment is the same for the other currencies in the market.
As we reported this Monday, April 11, from CriptoNoticias, in this range close to $40,000, bitcoin seems to be weakening and there are those who expect a greater drop. Data from the analysis firm Glassnode indicate precisely a weakness for bitcoin to consolidate above $45,000.
In case of having achieved it, as we have previously reported, the expectation was indeed bullish. The breakout of $48,000, had it held strongly, could have triggered a new attempt to retake last year’s highs.
At the moment, that has not happened, despite the fact that the price floor has been climbing in recent weeks. A steeper drop could take BTC back to the previous support of $37,000. The price of the cryptocurrency is in danger in this scenario, although right now it remains above 40,000.