When there is too much fear in the market, it cannot stay in that state for long.
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Any system — whether it's the economy, the market, or even a regular store — eventually comes to equilibrium sooner or later.
If everyone is only waiting for deterioration and no one believes in growth, it means there is almost no one left to sell.
And when there are few sellers, the price stops falling and starts looking for a support point.
That's why after strong pessimism, the market usually either stops or starts to recover — at least temporarily.
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Why growth can start even without good news
When the price is falling for a long time, many market participants profit from the decline.
But at some point, they start to take profits, that is, buy back what they previously sold.
Buying is always a push for the price upwards.
Then a chain reaction occurs:
• growth forces other sellers to close,
• their purchases strengthen the movement,
• the price rises faster than expected.
The stronger the fear was, the sharper the first bounce usually is.
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What happens at the moment of maximum fear
When the mood of most people is negative:
• ordinary buyers leave the market,
• trading volumes decrease,
• the price becomes more sensitive even to small purchases.
In such a situation, it is easier for large participants to buy, because almost no one interferes with them.
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The conclusion in simple words
Right now we see some of the most pessimistic sentiments in the history of the crypto market.
But the markets do not like extremes.
When fear reaches its maximum:
• the decline slows down,
• balance starts to recover,
• ground for growth appears.
This is not a guarantee of a quick recovery, but a sign that the worst part of the decline may already be behind.
Sometimes, for things to get better, everyone needs to be very scared.
