BUY BITCOIN
At times, taking a contrarian stance in financial markets can be rewarding, other times it’s a fools game trying to go against the trend, and in crypto and Bitcoin markets that offer little liquidity by comparison against stocks, both the risk and reward are significantly amplified.
That’s why investors stand to gain substantially by being on the right side of the trade. In this case, much of the crypto market is overly bearish despite the bullish momentum, and it could cost those hoping to buy the dip. In fact, one crypto analyst says this is the most likely scenario – the “max pain” scenario – will leave dip buyers with unfilled orders indefinitely.
Buy the Dip? Crypto Bulls May Be Too Late
After painting a nasty looking June monthly candle, Bitcoin has risen once again above $11,000 and made another attempt at above $12,000. Yet the sentiment across the crypto market suggests that traders are leaning bearish, and expect Bitcoin to go back below $10,000 and potentially even go as low as $6,000. Extreme bears still exist calling for lows below $1,000, but there’s always extremes on both sides of the fence.
Related Reading | Crypto Analyst: Bitcoin Technical Indicator Struggles At This Range Before Bull Run
But that “dip” everyone is looking to buy, may have already happened and buyers will be forced to suffer through FOMOing back in at a much higher price once Bitcoin refuels its jets and takes off once again.
$BTC This poll shows the majority are sitting on the sidelines in cash, praying for a bigger pull-back to get in. The max pain scenario from here is up. And the people sitting on the sidelines will be the FOMO-fuel to new highs. https://t.co/dpk3IfRjZ2
— Zen (@Zen_Trades1) July 4, 2019
One crypto analyst says the “max pain” scenario would leave so many people wanting to buy cheap Bitcoin, but are later forced to buy it at much more expensive prices. Not only would the move cause much “pain” and losses for investors, but the later buying back in would only further drive the prices up higher, leaving those later to capitulate and buy at high prices stuck footing the highest bill.
Related Reading | Poll Shows Crypto Sentiment Overly Bearish, Contrarian Bitcoin Price Move Incoming
The analysts comments were in reference to the results of a poll shared on Twitter by published author of An Altcoin Trader’s Handbook, Nik Patel. The poll showed 59% of respondents expecting Bitcoin below $10,000 once again, while a mere 23% said no. Another 18% simply selected to see the results of the poll, which could suggest the sentiment is even more bearish than the poll data suggests.
Will we ever seen $10,000 $BTC again?
— Nik Patel (@cointradernik) July 4, 2019
Bitcoin dipped below $10,000 briefly last week, setting a local low of around $9,600, resulting in over a 30% drop from the local high of $13,800. 30% or more drops in the past have led to an average 153% rise afterwards. Should this happen, a new all-time high would be set from here at roughly $24,000 – and the FOMO from those waiting to buy the dip might be the buying frenzy that takes us there.
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