For more than three days, Bitcoin (BTC) and other cryptocurrencies have been experiencing a sharp drop, falling below $43,000 per coin. In addition to a few unexpected situations, such as Elon Musk’s statements or a poor understanding of BTC consumption, we are experiencing an entry into the fear zone.
Misunderstanding of the market is a disaster for the value of assets
Today, the crypto fear and greed index has reached levels forgotten since 2017 and 2020, and that many do not even want to remember, because of the unpleasant experience. As a market, we really enjoy the increase of the dominant cryptocurrency, but we also have to learn to face adversity such as scarcity, volatility, and crypto-indes of fear and greed.
At the moment, the price of BTC is $44,316, and the strong resistance level is $45,000. But, apart from the reasons to blame for the pullback, we can add that the continued decline is mainly due to all those retail sales of traders who do not understand the movements of the market, which is undergoing a price correction. Even if the reasons were unexpected, a healthy correction was necessary for a weighted growth that highlights BTC as a new means of saving, rather than an exchange currency.
One of the things we need to understand is that as users, we need to mature and synthesize our emotions into a solid understanding of the analysis we have done. The fundamentals of the crypto market, especially BTC, are well supported by a variety of investors, including institutional ones. In addition to the fact that we are witnessing comments that are not at all carefully thought out, but simply improvised, we must focus on a deeper analysis of the players involved in this game. Even Musk said that Tesla is not going to sell its BTC. And even if it wasn’t, it wouldn’t matter much either.
We are at an interesting market stage, because we live in a system that is sinking deeper and deeper into internal poverty, unable to find a solution, but at the same time affects part of the welfare of the state. Perhaps the system is simply not engaged in developing new solutions, but is responsible for maintaining the policy of not being able to exit, and this is the main motivational index that should be built for BTC.
Cyclical nature of the market and problems of society
Selling Bitcoin right now is the worst decision they make, as BTC is a reliable asset-saving solution. A policy similar to the one preached by the US Federal Reserve will focus only on keeping rates close to zero. Manipulation in markets such as gold or silver markets is obvious, so as not to lose the confidence that revolves around the dollar. Why do they think it will be different with BTC?
Perhaps you should allow yourself to quote a statement by Mike Novogratz, the founder of Galaxy Digital, for Cointelegraph in early January of this year, where he said:
“I am sure that Bitcoin will recover again, but people are not built to live in conditions of 150% volatility. It was a signal. Once the volume decreases, we will reach the bottom and resume growth again”.
The quote itself reflects what we should do: not give in to fear and take advantage of the opportunities that we are looking for in the market.
Source: https://news.bit.team/a-spirit-of-fear-and-greed-in-the-crypto-space/