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The cryptomarket is under severe bear market pressure.
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Bitcoin has lost nearly 24% over the last month.
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Experts see “Extreme Fear’ as a good opportunity to buy.
A glance at the price charts of the top cryptocurrencies shows that the crypto market is under extreme bear pressure. Bitcoin, the largest cryptocurrency based on market capitalization, has lost nearly 24% of its value in the last month. This has led to other cryptos experiencing a massive loss in value.
The events of the last month have changed the narrative surrounding the crypto market, turning a bullish market into one that is significantly bearish. The rapid change in narrative affected users’ feelings, with the cryptomarket moving from a greedy feeling to extreme fear in under 30 days.
Fear and Greed Index – A Rapid Shift of Sentiment
The crypto market was “Greedy”, last month, and “Neutral”, a week before it shifted to “Extreme Fear”, in the past few weeks. The rapid changes in the market have triggered FUD. Many traders are confused and unsure if they should hold onto their positions or sell their portfolios.
Related: Crypto Market Plunges into “Extreme Fear”. Time to Buy?
The Fear and Greed Index measures the emotional state among crypto market participants. The analysis tool measures user reactions by using human behavioral data. It also considers their potential behavior in different market conditions. People tend to be greedy during bull markets because of Fear Of Missing out (FOMO). They sell their assets when the market is declining because of FUD (Fear, Uncertainty and Doubt).
Contrarian Investing – Buying when others are afraid
Expert traders have discovered ways to capitalize on human behavior tendencies in order to find profitable opportunities on the crypto market. Experienced traders will often use extreme fear as a buying opportunity, pointing out that digital assets may be cheaper and more affordable. They see greedy market conditions as an opportunity to sell.
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This explains the zigzag behavior of crypto markets, as demonstrated by the recent trend where the market went from “Extreme Greed”, to “Extreme Fear”, in a short time. Many top experts believe that the current situation will continue and that traders who buy crypto at the present price are making the right choice.
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