The greed index has reached a historical high, Bitcoin is breaking records, altcoins are falling without rising, are you panicking?

The greed and fear index returned to 90 yesterday, and the open interest in the futures market continues to increase, reaching a terrifying 106 billion. With such a large amount of fat, the main force will definitely cause a double explosion of longs and shorts, cleaning up leverage, and the risk of short-term volatility is increasing, entering a situation dominated by the futures market.

In the past few years, there have been three instances where the index touched 90 or even higher: the end of June 2019, the end of October 2020 to early February 2021, and early March 2024. The first and third instances both saw a quick drop after soaring to 90, with the market quickly reversing.

Only the period from October 2020 to the first quarter of 2021 saw the fear and greed index remain in a state of extreme greed above 90 for more than ten weeks, peaking at 95.

The logic here is: the bear market shifts to a bull market in a volatile market, and extreme greed is not sustainable. However, during the peak of a bull market, extreme greed can last a long time until the final emotional exhaustion.

I believe we are currently in a volatile phase of the bear-to-bull transition, and the state of extreme greed is not sustainable. The extreme pull in Bitcoin's price over the past two days indicates fierce competition between longs and shorts. From the trend, it favors the bulls, while from the data, it favors the bears. However, I am not bearish; I just want to highlight the volatility risk. Any opportunity for a sharp downturn should be seized to purchase the spot.

This pull indicates Bitcoin's short-term up and down fluctuations until one side is exhausted. The fact that it has not broken below 90,000 suggests that the sentiment after the election results has not completely faded. However, altcoins have noticeably weakened in the past few days, and this market trend is largely driven by emotional liquidity among market participants. I believe Bitcoin will reach 100,000, and altcoins will see another wave of upward rotation.