Bitcoin entered the correction after flying over previous highs in early November. BTC is currently trading for about $ 58,000 – nearly 16% below its historically high price of $ 69,000 registered on Nov. 10, according to Clark Moody Bitcoin Dashboard.
Whenever the price drops, newcomers are nervous, while lovers for a long time enjoy buying and storing cheap clothes. The difficulty of newcomers lies in the short-term vision of becoming a millionaire, which some usually promote. At the same time, Bitcoiners can buy more BTC when the price drops. This dynamic is part of human nature, because one tends to sail in the wind. In general, however, apply emotion to your investments may damage your strategyand the best strategy is to “play it cool”.
Armed with basic bitcoin knowledge and an experienced past of BTC ups and downs, the Bitcoiners, who have been part of the community for a while, are no longer affected by the extreme fear that falling prices will flood the market. They benefit from it. Whenever bitcoin fails, the Bitcoiners are the first group to intensify and “buy a dive” into reality because they know that historically the price trend has been rising.
One of the tools for measuring mood in the market is the bitcoin index of fear and greed. When investors are too scared, there may be a good buying opportunity and the correction may be coming to an end. On the other hand, when investors are too greedy, there may be a remedy that would stop the rally. A value of zero means “extreme fear”, while a value of 100 means “extreme greed”.
The legitimacy and accuracy of this index and whether it can serve as a tool for predicting prices will certainly be discussed. However bitcoin index of fear and greed He pointed out some interesting correlations and can serve as a tool for investors to put aside their emotions and identify opportunities.
At the time of writing, the index represents a “fear” in the market mood with a score of 34, as bitcoin remains below $ 60,000. In the past, when things went south and sentiment declined, the index reached single-digit levels, for example in March 2020 and May 2021. In both periods, there was a sharp drop in prices, which virtually killed the hopes of mainstream investors. However, Bitcoin did not die in either case, nor did it die in any other, a fact that repeats Bitcoiner’s motto “buy a dive”.
As already mentioned, there is no best time to buy bitcoins. Those who are waiting for the decline may remain hanging, while bitcoin has double-digit green months, just as those who buy immediately may see a fall in prices in the short term. The bottom line is that in the long run, it doesn’t matter when someone bought it, but whether it was.