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Home Cryptocurrency news

Peak “Fear” Crypto Market Shows Big Bitcoin Recovery is Imminent: Analyst

Tony Spilotro by Tony Spilotro
11 months ago
in Cryptocurrency news, Bitcoin
Reading Time: 2min read
cryptocurrency market cycle sentiment fear disbelief greed index
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The crypto market is on fire this week, with Bitcoin price exploding well above $7,000 and the rest of the market outperforming the leading crypto by market cap.

However, even though prices are taking off across the market, according to the Fear and Greed Index, the market is still in extreme fear. One crypto analyst says that prices rallying while investors are fearful is suggests the market is in a classic disbelief phase and following should be the first signs of hope of a sustainable long-term recovery in the digital asset class.

What Phase Is the Crypto Market Cycle In?

Crypto analysts have long argued over what stage of a classic market cycle the market is in. All markets are cyclical in nature, and the crypto market is no different.

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Financial markets and even crypto assets go through regular, alternating periods of uptrend and growth, followed by downtrend and decline.

Related Reading | Despite Cryptocurrency Market Recovery, Sentiment Is Still Extremely Fearful 

During these cycles, investors experience specific sets of emotions depending on where they are in each cycle. For example, when a top is near, and a cycle is about to peak, investors tend to be irrationally exuberant in their expectations for continued growth.

At that stage, investors often think they’re somehow a genius, and are about to strike it rich. They are blinded by their portfolio numbers increasing by the day and don’t see the collapse coming right in front of them.

The inverse is true at the bottom.

Classic Disbelief Phase Could Leave Investors Behind When Bitcoin Takes Off

Crypto investors have been mentally conditioned to expect more downside, have become fed up with the asset, and have lost hope for a recovery. This is called the disbelief stage and sneaks up on unsuspecting investors who have often have just been shaken out during a downtrend.

crypto
Crypto sentiment at peak fear

As the asset begins to pick up positive momentum once again, investors ignore the signals that an uptrend is starting.

They simply don’t believe the recovery is real or will have legs, and don’t take a position. Sooner than later, the asset has taken off on a powerful rally, and investors must FOMO-buy back into the asset at a higher price than they would have liked to, because they ignored the early signs that a recovery was taking place.

Related Reading | Is the Coronavirus The Black Swan Event That Crushes Cryptocurrency?

Bitcoin and the rest of the crypto market has nearly doubled since the extreme low set back in mid-March, meanwhile, the crypto market Fear and Greed Index remains in a state of extreme fear, showing that this very well could be the disbelief rally that leaves burned and beaten investors in its dust, as the asset class takes off to new highs.

Featured image from Shutterstock
Tags: bitcoinbtcusdcryptocrypto market fear and greed indexcryptocurrencyfear and greed indexmarket cycle
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a digital media executive and global remote work leader with a decade of content experience and excellent. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter and feel free to drop me a line if you would like to work together.

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