Bitcoin’s Cycle Top? Low 1.59 Risk Says Bull Run Isn’t Over

Bitcoin price reached an all-time high of $99K earlier, with low systemic risk at 1.59, signaling the potential for more growth.

Market sentiment remains split between FOMO for $100K and fear of a correction. Here’s what the data tells us about the next move

Bitcoin’s Risk at 1.59 Signals Potential for Further Price Growth

The diagram displayed in the image above plots the Bitcoin price (white line) against a risk measure (blue line). This becomes a fluctuating risk metric with distinct highs and lows that are generally in correspondence with Bitcoin’s markets.

– Advertisement –

Higher risk levels were identified during the market tops, and low-risk levels were associated with increasing market prices.

At present, one unit of Bitcoin costs $99k. The risk metric currently is at 1.59. Meaning that the BTC is not as risky or speculative as during the previous cycle peaks.

This low-risk level suggests that there could still be a large unknown level of upside in Bitcoin in this cycle.

– Advertisement –

The previous cycles when the risk metric was similar also recorded further price increases to the top level.

$100K Bitcoin Mentions Hit Historic Highs, Signaling Peak FOMO Sentiment

Santiment data indicates that social and psychological sentiment has risen with Bitcoin attaining its ath of $99,000.

These online social media platforms, including X (ex-Twitter), Reddit, Telegram, 4Chan, and BitcoinTalk have noted unbelievable discussions regarding Bitcoin price touching $100,000 and above.

This data confirms a fairly high level of the Fear of Missing Out (FOMO). Traders and investors expect BTC price to reach the six-digit level for the first time in its history.

It also has been learnt from the data that there is a perception of lower prices of $60K-$79K over the recent periods.

This implies that a large segment of the market is impatiently waiting for a reversal, saying this cannot be sustained, yet its price has soared.

When the majority wants to reach a certain figure, say $100,000, it is also likely that the market goes in the opposite direction.

Based on the commentary, it is indicated that those with bearish outlooks and skeptics could be indirectly participating in the rally.

Long/short ratio at 0.71 Signals More Traders Bet on BTC Price Decline

Out of the total active accounts as of November 22, 58.39% have taken short positions. 41.61% are taking long positions, expecting the Bitcoin price to rise.

The long/short ratio is 0.71; this indicates that long positions are fewer than short positions.

In the last couple of days, it is clearly visible that a high percentage of traders are choosing to bearish on Bitcoin. This points toward the indices exercising bearish pressure in the market.

It could be due to undone economic hardship, or recent fluctuation of Bitcoin price. Or overbought signs on different trading indicators that traders expect to sell to lower price levels.

Historically, such a state of affairs relates to the orientation of the long/short ratio with regard to the changes in markets.

A lot of shorts could lead to short squeezes in the event that the price of bitcoins rises. Short traders are forced to close out their positions, in heightening the rate of price rise.

On the other hand, it could also be illustrating that a majority of the short traders expect that Bitcoin prices can undergo short-term fluctuations around the cryptocurrency’s market value.