Contrarian Bitcoin investors identify buy zones even as extreme fear grips the market

This article discusses Bitcoin, a digital currency that is traded over the internet and has experienced significant volatility in recent years.
The article provides an overview of what might be happening with Bitcoin as it makes its way through 2018.

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The “fear and greed index” is a tool that Bitcoin investors can use to identify buy zones. It is created by contrarian investors who are trying to profit from fear in the market.

With several tokens in the top 100 now exhibiting signs of stabilization as prices rallied off their recent lows, Bitcoin (BTC) support near $30,000 has shown to be extremely durable throughout the upheaval of the previous two weeks.

Contrarian-Bitcoin-investors-identify-buy-zones-even-as-extreme-fearFear & Greed Index. Source:

It’s tough to adopt a contrarian perspective during periods of high volatility and sell-offs, so traders should step back from the noise and unfavorable headlines to concentrate on their basic beliefs and reasons for investing in Bitcoin in the first place.

Several indicators indicate that Bitcoin may be nearing a bottom, which will be followed by a long period of consolidation. Let’s see what the experts have to say.

BTC may have already surpassed its “pain threshold.”

The surge in Bitcoin holders’ realized losses was highlighted by ‘Root,’ a pseudonymous expert, who tweeted the following graphic and said that realized losses are “hitting bear market highs.”

1652996033_121_Contrarian-Bitcoin-investors-identify-buy-zones-even-as-extreme-fearBitcoin’s profit/loss was realized. Twitter (source)

While prior bear markets have witnessed higher levels of actual losses than the current one, they also imply that the agony may soon begin to lessen, allowing Bitcoin to resume its long recovery path.

“Bitcoin’s RSI is now entering a phase that has historically preceded outsized returns on investment for long-term investors,” according to analysts.

1652996034_941_Contrarian-Bitcoin-investors-identify-buy-zones-even-as-extreme-fearRSI for BTC/USD. Twitter (source)

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Rekt Capital claims that

“Reversals from this location have already occurred in January 2015, December 2018, and March 2020. The bottom of every bear market.”

The solid grip of strong hands

Jurrien Timmer, Global Director of Macro at Fidelity, gave more on-chain evidence that Bitcoin may soon experience a recovery. The Bitcoin Dormancy Flow is a statistic that depicts the dormancy flow for Bitcoin and “basically speaking is a measure of strong vs. weak hands,” according to the Bitcoin Dormancy Flow.

1652996034_202_Contrarian-Bitcoin-investors-identify-buy-zones-even-as-extreme-fearDormancy flow in Bitcoin Twitter (source)

Timmer explained,

“Glassnode’s entity-adjusted dormancy flow is presently at its lowest point since 2014 and 2018.”

The Advanced NVT signal, which looks at the Network Value to Transactions Ratio (NVT) and adds standard deviation (SD) bands to indicate whether Bitcoin is overbought or oversold, is one statistic that shows the weak hands are on the verge of collapse.

1652996035_958_Contrarian-Bitcoin-investors-identify-buy-zones-even-as-extreme-fearSignal for advanced NVT.

The advanced NVT signal, marked in light blue on the chart above, is now more than 1.2 standard deviations below the mean, indicating that Bitcoin is presently oversold.

Previous occurrences of the NVT signal dropping below the -1.2 SD threshold have been accompanied by gains in the price of BTC, however this may take months.

Bitcoin price forecasts abound as traders anticipate the next BTC halving cycle.

The hash rate has reached a new all-time high.

Aside from complicated on-chain measurements, there are a number of additional indicators suggesting Bitcoin may experience a surge in popularity in the near future.

According to data from Glassnode, the Bitcoin network’s hashrate has reached an all-time high, suggesting a significant rise in mining infrastructure expenditures, with the United States seeing the highest growth.

1652996036_539_Contrarian-Bitcoin-investors-identify-buy-zones-even-as-extreme-fearBitcoin price compared. average hash rate Glassnode is the source of this information.

According to the chart above, the price of BTC has traditionally risen in tandem with rises in the mean hash rate, suggesting that BTC is about to enter an upswing.

Looking at the Google Trends data for Bitcoin, which shows a jump in search interest after the current market drop, offers one last ray of light.

1652996037_761_Contrarian-Bitcoin-investors-identify-buy-zones-even-as-extreme-fearThe desire to find Bitcoin has grown over time. Google Trends (source)

Previous surges in Google search interest have usually corresponded with a rise in the price of Bitcoin, so BTC might see a relief bounce in the near future if sidelined investors view this as a chance to get some Satoshis at a discount.

The author’s thoughts and opinions are completely his or her own and do not necessarily represent those of Every investing and trading choice has risk, so do your homework before making a decision.

The “fear and greed bitcoin” is a phenomenon that has been present in the cryptocurrency market. Contrarian investors have identified buy zones even as extreme fear grips the market.

Related Tags

  • crypto fear and greed index
  • fear and greed index ethereum
  • cardano fear and greed index
  • bitcoin sentiment indicator
  • bitcoin fear and greed index tradingview

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