Although everyone knew bitcoin is volatile, they did not expect the December 4th trading loss. In five months, such a worst trading day has instilled fear among bitcoin traders, as the coin plunges to a two-month low of 42,000. Although the losses and gains are expected when trading the coins, the massive crash change within the 24 hours led to investor sentiment. Bitcoin has maintained its position as the most stable cryptocurrency, but traders have classified it as a coin with extreme feat on the Bitcoin Fear & Greed index.
The Fears within the Cryptocurrency Sector
The greed and fear index shows how the momentary investor feels towards bitcoin cryptocurrency. The indicator tracks different segments, which show cryptocurrency volatility and market indicators like coin volume, social media comments, and surveys. The indicator then ranks the result from 0 to 100, with 0 as extreme fear and 100 as extreme greed. The recent bitcoin $42000 price dump has lowered the metric, and now the coin is at 16, which is extreme fear.
The last time was at the extreme was during the July 21st $3000 value dive. Since then, the coin had been on an all-time high price of about $70000 throughout the months between July and mid-November, and the bitcoin kept its value above $60000, and the changes occurred by the end of November when the currency was valued at $55000. Market spectators think the new bitcoin price dive might be attributed to the new Omicron Corona discovered within the time frame in South Africa. Each new coronavirus impacts the financial sector, and the cryptocurrency is susceptible to such changes.
However, bitcoin employs tactics to push its price up, but it has not been successful. Bitcoin investors are concerned, and it seems the index has moved from fear to extreme fear within a few days indicator investor worry. The on-chain development might have foreseen the crash, but it could have done little to salvage the situation. Soon, the number of bitcoin exchanges spiked sharply within hours, leading to the drop.
Does Whales Sale More Now
The CryproQuant’s exchange whale ratio compares the top deposits to exchanges with other deposits. Unfortunately, the fear expressed by the bitcoin investors has made some of the investors deposit assets to the trading platform. This metric is at 85 in the bear markets and has surged to 95 after the sudden bitcoin crash. Consequently, cryptocurrency market analysis warns that Bitcoin price might dive once more if Whales decides to sell the large coins in large quantities.
Is It Time to Buy Bitcoins?
Some investors believe it might be the right time to buy the bitcoins due to the low price, but it may not sound like a ringing bell. Warren Buffet, the billionaire investor, believes the investors should be greedy, thus buying the bitcoins when others are shying away from the currency might be profitable. Countries like Salvador that use bitcoin as a legal tender favor the price decline, and more investors are invested in the crypto market. President Bukele Nayib noted that his nation had purchased additional 150 coins at a $48500 average price. Although the bitcoins might be volatile, the market is still new, and investors should not give up on their favorite coin yet.
Final Thoughts
The bitcoin has been at the center of value decline, resulting in extreme fear among investors. However, the company has been trying to bring the coin back to its glory in vain, and the price dive might be associated with the new Omicron coronavirus variant. Although the virus variant impacts other sectors, bitcoin was hit hard, leading to a new low in months. However, investors think the cryptocurrency sector has potential, and people should invest in bitcoin.
