Is Bit coin ready to escape the peak?

Just this afternoon (November 21st), BTC ($BTC) once again broke the historical record high, reaching $97,874. As the price continues to soar, market sentiment has reached a new peak.

According to Coinglass data, the 'Fear and Greed Index' of BTC ($BTC) has been consistently high since November 12, staying above the 'extreme greed' area of 80.

Image Source: CoinglassBTC Fear and Greed Index

"Fear and Greed Index" rise indicates the optimistic sentiment of investors towards the price trend of BTC. However, during the period of BTC repeatedly breaking new highs, an important question has also emerged in the community: whether to continue holding BTC now or choose to dump at the high point?

Fear and Greed Index

The Fear and Greed Index is an indicator used to quantify market sentiment, ranging from 0 to 100.

Generally speaking, 0 to 49 represents a market sentiment leaning towards fear, with lower numbers indicating higher levels of fear; 50 to 100 represents a market sentiment leaning towards greed, with higher numbers indicating higher levels of greed.

Image Source: CoinglassBTC Fear and Greed Index

From a historical perspective, when the fear and greed index is extremely low, it may indicate that the market is overly shrouded in fear, which is usually seen as a buying opportunity (because prices may be undervalued); when the index is extremely high, it may indicate that the market is overly optimistic or bubbly, typically seen as a potential profit-taking signal, implying that the market is about to pullback.

Meanwhile, in the past week, the outflow of funds from BTCMiner has significantly increased, with more and more miners choosing to take profits at high levels. This is usually a precursor to a significant fluctuation in BTC.

The buyer's support against dumping pressure

Interestingly, the choices of long-term holders of BTC are quite different. According to data, although 300,000 BTC have been dumped in the past month, it is far lower than the data during the peak period of BTC in March 2024, when the market dumped over 1 million BTC in a few weeks.

This means that even though Miners' dumping behavior has increased, the selling pressure in the market is far less intense than in the previous Bear Market cycle. On-chain data shows that around $89,200, over 300,000 Addresses have purchased BTC, indicating that long-term holders' "diamond hands" have formed a stable support.

Sell or continue holding?

Based on the above data, when investors are judging whether to sell at the peak, they need to pay special attention to two key data points: the 'Fear and Greed Index' and the 'trading trends of Miners and long-term holders'.

If the fear and greed index continues to stay in the 'extreme greed' zone, be cautious of the potential market sentiment reversal, and if Miners continue to increase the dumping scale, the possibility of a short-term market pullback will be further increased.

On the other hand, the steadfast attitude of long-term holders and the active buying behavior on-chain are important keys to support the current price. If the buying momentum drops and breaks the balance between the current and the miners' sell-off, it may imply that the market is about to reverse.

Whether choosing dumping or continuing to hold, in the current market sentiment, the biggest focus in the coming weeks is whether BTC can break through $100,000 by the end of the year.

[Disclaimer] There are risks in the market, and investment needs to be cautious. Analyst views are for reference only. Users should refer to more diverse indicators to judge whether to invest and consider whether any opinions, views, or conclusions in this article are suitable for their specific situation. The responsibility is at your own risk.

The article entitled 'Is it time for Bitcoin to escape the peak? Should you sell or continue to HODL, you must understand these 2 data points' was originally published in 'encryption city'.