70 Days Extremely Scared: Is the Crypto Market Repeating Historical Bottoming Areas?
The crypto market has been in the Fear & Greed zone in an extremely scared state for 70 consecutive days. This is not the kind of signal that makes the majority feel comfortable, but looking back at history, prolonged periods of pessimistic sentiment like this often appear near very notable valuation areas.
Previously, every time extreme fear lingered, it was associated with a major shock to the market. March 2020 was the crash due to COVID, after which the market gradually recovered strongly over about 6 months.
November 2022 was the collapse of FTX, and those who were patient enough to buy around the Bitcoin price of 16,000 USD have since seen significant profits. The common point of those periods is that when emotions hit rock bottom, the market often begins the recovery process before the majority can believe that the worst is over.
However, this time the context is still more complicated. Besides the intrinsic factors of crypto, the market is also influenced by the Fed's interest rate policy and geopolitical risks surrounding Iran. Therefore, no one can be sure where the exact bottom lies.
The approach I find reasonable at this time is still to go slow and be disciplined: DCA at each threshold, not trying to catch the bottom, and not going all-in just because the price has dropped significantly. If the market continues to decline, I see it as an opportunity to buy assets at better prices. As for the rest, just let time answer.
#BTC
