Bitcoin and altcoins are starting to recover, as dust is now settling in the record-breaking collapse of the crypto market, which took place earlier this month, along with the stock market, gold and many other traditional assets.
However, according to the Cryptocurrency market prices Fear and Greed Index, though the cryptocurrency prices are generally recovering, the feeling is still under extreme fear. Is it time to be greedy when the market is scary, or is it too extreme to take a new position?
Cryptocurrency Market Ribaunds, But Emotion Remains in the Gutter
Since cryptocurrencies are speculative assets and most of their valuations are derived from hype and promise, investor feeling is particularly important.
And since this is a very important factor, Fear and Greed Index It is designed to monitor investor feelings and help derive meaning from this feeling that has reached extreme fear and greed.
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The index is so accurate in representing the emotional state of the market that it has been used successfully as a trading strategy.
Often, tremendous profits can be made by taking a position against the market. As famous Warren Buffett saysIt is wise to be fearful when others are greedy, and greedy when fearful.
And with so much fear of the market, it's time to buy this old proverb Bitcoin with everything you've got, fear has never been more extreme.
There is fear not only in the crypto market, but also all over the world. Coronavirus is a terrifying black swan incident that causes such mass disruption and death, not only from the pandemic of the whole world, but also from the potential economic fallout that could last for decades as the world heals.
Since fear is so extreme inside and outside the cryptocurrency market, it is wise to be extra careful when considering any investment or transaction and additional risk management strategies should be implemented.
– Rekt Capital @rektcapital Instagram photos and videos • Imgwonders March 24, 2020
Coronavirus Crypto Investors Causing Excessive Fear Must Continue Carefully
However, reaching extreme fear does not always coincide with a price increase. For the last time, the fear was so high, it was in August 2019, when Bitcoin was trading over $ 10,000. In the following month, Bitcoin was down $ 2,000.
Despite one of the biggest falls of the year, this drop did not return to the extreme fear he had just seen a month ago.
Related Resources | Is Coronavirus the Black Swan Incident that Crushes the Crypto Currency?
But undeniable is that extreme fear can cause investors and markets to react unreasonably. And since it is so unpredictable because of the coronavirus, it is best to play safely and proceed with caution.