Noob FOMO Buyers Reach “Mania Levels,” Volume Makes New Record on Thanksgiving
Everyone was apparently waiting for the opportunity to buy the dips as the volume recorded on cryptocurrency exchanges exploded to new highs.
The sell-off started right after climbing to a new 2020 high of $19,500 after Coinbase CEO Brian Armstrong tweeted about speculation that the US Treasury Secretary was considering regulating self-custody wallets. Antoni Trenchev, the managing partner of Nexo in London, told Bloomberg,
“News that the Trump administration may clamp down on crypto might have been a trigger for the drop.”
But of course, after a rally of 85% in just two months, any asset “is allowed to undergo a correction,” which gained momentum due to many people over-leveraging. Vijay Ayyar, head of business development with crypto exchange Luno in Singapore said,
“Conditions are very massively overbought and bound for a correction,”
“So I don’t think it’s unusual.”
Overall, it was a normal pullback after the euphoria for seven straight weeks. Once the dust settles, it will be business as usual, reaching for new ATH.
And this is why people came rushing in to scoop off cryptos at such low prices.
— Mati Greenspan (tweets ≠ financial advice) (@MatiGreenspan) November 26, 2020
Not just on the spot market but also in the futures, a similar pattern can be seen as they made a new record. This resulted in CME becoming the largest futures market for Bitcoin with open interest (OI) surpassing $1.1 billion, which further solidifies the fact that institutional investors are definitely here.
As a matter of fact, earlier this week, Queen Elizabeth II was “left delighted” after learning about Bitcoin in a blockchain journal that the 94-year-old received in the post. According to a letter from her office, she “much appreciated the thoughtful gesture.”
Now people are wondering just how many BTC she has.
— skew (@skewdotcom) November 27, 2020
But the crypto sale is not over yet; the digital asset can go as low as $13,500 in this correction.
“Margin longs will be spanked until they go short. Was bullishness was way overheated,” noted on-chain analyst Willy Woo who says the fundamentals of Bitcoin are great as such, the next few weeks is a “great time to scoop cheap coins for 2021.”
While smaller buyers marked the last phase of the run to ATH resistance, the rate of that class of noob FOMO buyers coming last week was the highest in this bull cycle, “right up there with 2017 mania levels,” Woo said.
This was further confirmed by the leading spot exchange Binance, which said it “is experiencing a big increase in new user sign-ups,” leading the exchange to have delays in its customer service.