Bitcoin (BTC) prices fell at $74,000 (USD) on Wednesday. This descent will exacerbate extreme fear in the cryptocurrency market.
Index Fear and greed (Fear and Greed) Coinmarketcap Explorer (from 19 points so far this week to 15 points. It should be noted that this score is now at the lowest level in a month and has since been almost over 20. Show greater pessimism in the market and show possible opportunities.
This metric measures the key sense of the cryptocurrency market on a scale of 0 to 100. Levels of 60-80 reflect high levels in greed and extreme conditions. On the other hand, points 20-40 indicate fear and minors of extreme conditions.
The results are calculated using key components such as price impulse change, volatility, derivatives, stubcoin, and user trends. In this way, we can observe whether the market is undervalued or overvalued.
Some investors use indexes as part of their opposing investment strategies. This “consistency of fearing what others are afraid of when they are greedy and greedy,” explains Coinmarketcap.
In this sense, “If the index shows extreme greed, it may be a signal to consider selling an asset, but extreme fear can indicate an opportunity to buy,” he says. Therefore, the current feeling shown in the following graph suggests that this could be a good time to acquire Bitcoin.
Anyway, it is possible that investment strategies that go against the sentiment that dominates the market is undoubtedly possible. Sometimes extreme fear status preceded deeper price drops, primarily in bearish cycles.
Taking this into consideration, it is key to establishing a risk plan that avoids falling into unnecessary scenarios. This is especially important given that some signs are now a glimpse of the possibility that a bear market has bearish markets have bearish on the rise.
Some see the beginning of BTC’s bearish cycle, while others buy it
According to Ki Young Ju, founder and CEO of Cryptoquant’s on-chain data company Bitcoin’s upward cycle is over. He is based primarily on market capitalization and what was done.
“If the capital implemented while the outcomes are rising, it suggests that even small amounts of new capital are driving upward prices. We see that capital is currently entering the market, but prices are unresponsive. This is typical of a bear market.”
Ki Young Ju, CEO DE Cryptoquant.
Experts added that sales pressure could always be reduced, but historically It took at least six months for the royals to return. Therefore, he believes that “short-term rebounds are unlikely.”
In other words, we are not thinking that the extreme fears experienced in the market today are the signal to buy, but rather to leave the market.
meanwhile, Other experts differ from this understanding, as is the case with large investors, also known as whales.over 10,000 BTC. As reported by Cryptonotics, these actors accumulate bitcoin at price drops, unlike the rest that most remain unselled.
Similarly, investor and analyst Uttam Day revealed in his latest report this week that his position in the market is on the rise. “I’m still very optimistic about Bitcoin,” he said. In his opinion, This moment still assumes the opportunity to purchase the resistance displayed In front of other assets.
The cryptocurrency with its main assets is affected by the imports thrown by President Donald Trump into US imports. This policy has created expectations for greater domestic inflation, creating recession and uncertainty about the future of the economy.
However, Bitcoin is not beat as much as other assets. The S&P 500 (SPX), an index that collects the main 500 US actions, fell at a price not seen in over a year. Furthermore, according to CNN, which shows an extreme level of fear than BTC, the national stock market’s terror and greed indicator is four points.
According to Dey, The greatest resistance of BTC is due to the range of positive catalysts surrounding it. This includes the environment from a regulatory environment to become more friendly towards global liquidity.
“Global liquidity is very important for Bitcoin, because at the end of the day it’s a volatile asset class. And most asset classes, especially risky assets, follow the general rules.
Uttam Dey, investment analyst.
We will strengthen the perspective and adoption of this asset for analysts, institutional investments and the creation of US government’s Bitcoin Strategy Preparation and withdrawal of judicial cases in the industry. Therefore, he believes he will benefit from increased liquidity.
Bitcoin falls are under normal in bullish cycles
The amendment that BTC lived in this week represents a 32% decrease in the largest historic price of USD 109,000, reached Trump’s assumption date in January. For now, this set-fold percentage is within the normal parameters that we had in bullish cycles.
Bitcoin experienced a 55% drop in the previous bullish cycle that ended in 2021 Before marking a new record. If this pattern is repeated, the price could rebound in the second half of the year if it can be seen in the next graph.
According to Richard Durant, director of Narinea Asset Manager The current cycle is already really tired, but maybe not finished. For him, BTC from USD 100,000 to USD 150,000 is still reasonable.
“Perhaps if prices fall below US$50,000 and monetary policy is easing significantly, we’ll be excited again with Bitcoin,” he says. He believes that citations motivate people to enter demand in a larger liquidity environment.
Beyond short-term uncertainty, Bitcoin has historically maintained a long-term bullish trend. So there are investors who prefer to follow an average cost (DCA) strategy, which means “average cost of the dollar.”
This tactic means repeat purchases of assets (in this case Bitcoin) to average the cost of acquisition. After that, set-offs can help balance the average investment price with the rise.
Whatever your strategy is, like any situation, it is important for operators to consider the inherent risks to avoid unnecessary scenarios.
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