Gate Latest Cryptocurrency Market Analysis (November 21): BTC plunges to 85,000, extreme panic signals spike

November 21 Cryptocurrency Market Analysis shows the market is in extreme panic, with the Fear and Greed Index dropping to 14, having briefly reached 11 overnight, the lowest level this year. Bitcoin’s current price is $86,750, with a trading volume of $1.54 billion, and the short-term key support level is at $85,000. Technical analysis indicates that mainstream coins have good liquidity but the bulls and bears are in intensified struggle.

Mainstream coins plummet over 6%, fear index drops to 14

(Source: Gate)

Bitcoin’s current price is $86,750, down 6.5% in 24 hours, with a trading volume of $1.54 billion. Such a decline is not uncommon in the crypto market, but combined with extreme market panic, it indicates selling pressure is intensifying. From a technical perspective, the short-term support at $85,000 is critical, with bulls and bears engaged in a fierce struggle. If this support level is broken, the next important demand zone is around $83,000, with the psychological level at $80,000 further below.

Ethereum’s current price is $2,850, down 6.7% in 24 hours, with a trading volume of $630 million. ETH’s decline is slightly larger than Bitcoin’s, which is typical for altcoins during market panic. Technically, the support near $2,500 is significant, as this level has been tested multiple times in 2024. Notably, institutional activity is frequent, with the market seeing for the first time ETH strategy firms selling ETH tokens, which may signal a reassessment of Ethereum’s short-term outlook by institutions.

The Fear and Greed Index has fallen to 14, having briefly touched 11 overnight, indicating the market’s pessimistic sentiment has reached an extreme level. This index measures investor sentiment, ranging from 0 to 100, where 0 indicates extreme fear and 100 indicates extreme greed. The current reading of 11 is the lowest this year; the last time similar extreme panic appeared was during the market crash in April 2024. Historically, extreme panic often signals the market is near bottom, but this does not mean prices will not fall further.

In terms of market depth, liquidity for mainstream coins remains good, with ample trading volume. The trading volumes of BTC and ETH show active market participation, contrasting with other altcoins where open interest has decreased significantly. Arbitrage opportunities are minimal, indicating high market efficiency with prices across different exchanges converging, a sign of market maturity.

Momentum indicators show mainstream coins are oscillating, while altcoins exhibit high volatility. Volume data indicates active trading for BTC and ETH, with relatively lower volume for altcoins. This structural pattern is typical in market downtrends: funds flow out of high-risk altcoins back into relatively safer mainstream coins, but overall, capital continues to exit the market.

Short-term trading strategy: Build positions in batches at $83,000-$85,000

Based on the current crypto market analysis, short-term trading should be cautious and flexible. For entry points, it is recommended to accumulate Bitcoin in batches around the $83,000-$85,000 range, and for ETH, buy the dips around $2,700-$2,750. These price ranges are based on technical support levels and historical trading clusters, providing some risk buffer.

Stop-loss and take-profit levels must be strictly adhered to. For BTC, set a stop-loss at $80,000, a key psychological level, as breaking below could trigger larger sell-offs. Take-profit at $88,000, a recent resistance level, and if broken, consider raising the take-profit level for further gains. For ETH, set a stop-loss at $2,400, a deep support zone; a breakdown here would confirm a trend deterioration. Take-profit at $2,900, close to previous highs, with potential for further upward movement if surpassed.

Key parameters for short-term operation

BTC Entry Range: $83,000-$85,000

BTC Stop-Loss: $80,000 (down 7.7%)

BTC Take-Profit: $88,000 (up 3.4%)

ETH Entry Range: $2,700-$2,750

ETH Stop-Loss: $2,400 (down 12.3%)

ETH Take-Profit: $2,900 (up 5.3%)

For position management, conservative investors are advised to allocate 20%-30% of funds, while aggressive investors may allocate 40%-50%. In an extremely panic-driven market environment, maintaining sufficient cash reserves is crucial, as prices could fall further, requiring funds for re-entry. A phased accumulation approach is better than a lump-sum buy, helping to average costs amid volatility.

The risk level is moderate; it is recommended to build positions gradually. Although the fear index indicates extreme panic, technical signs have not yet confirmed a bottom: RSI is near oversold but not in the zone, MACD remains bearish. Bottom-fishing should be cautious to avoid early over-commitment and further trapping.

Medium-term bullish oscillation layout, allocate 60% BTC and 40% ETH

From a medium-term crypto market perspective, the trend is mainly oscillatory, cautiously bullish. Currently, there are no clear bear market confirmation signals, nor strong reversal catalysts, making prices likely to fluctuate within a broad range. This oscillation could persist for weeks or even months until a definitive breakout occurs.

A conservative allocation strategy suggests 60% BTC and 40% ETH. Increasing BTC to 60% is based on its status as the “digital gold” in uncertain markets, typically more resilient during downturns. ETH’s 40% allocation considers its technological upgrades and institutional adoption potential for the long term, maintaining a moderate aggressive stance.

Key points investors should watch include SEC regulatory developments and institutional investment trends. The SEC’s progress on crypto ETFs, enforcement attitude toward DeFi protocols, will significantly influence market sentiment. Institutional fund flows, especially the continuous net inflows or outflows in spot ETFs, often signal trend changes.

A scenario-based approach recommends maintaining flexible positions to adjust promptly. In oscillating markets, fixed allocations may miss adjustment opportunities. If the market strengthens, consider increasing positions and adding strong-performing altcoins. If the market weakens, reduce positions decisively and increase cash holdings. Although this dynamic adjustment involves frequent trading, it better controls risk and captures swings in a volatile market.

Liquidity health assessments indicate that Bitcoin and Ethereum have relatively stable prices, with good market depth, ample trading volume, and minimal arbitrage spreads, reflecting high market efficiency. These indicators suggest that despite downward movements, the market structure has not collapsed and still holds potential for rebounds.