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The crypto market is shaking. Bitcoin depicts index fear and greed that throws on 10-a levels of extreme fear unprecedented since winter 2022.
Bitcoin emotional barometer
The index of fear and greed, created by an alternative, is not just a gadget. He is a seismograph of emotions on the market.
On a scale of 0 to 100 it oscillates between collective euphoria and overall contribution. Today the needle stiffened to the 10th number that reverses blood: the last cost of bitcoin experienced such a terror, was worth $ 16,000.
But behind the characters, the irreconcilable mechanics reveals. This collapse of morality monitors a 14 % decline in bitcoins per week and throws it below $ 85,000. Reasons? Explosive cocktail: massive disposal ($ 2.16 billion in surrender), control pressure and shadow of the same decay.
In history, however, there is a flash of hope. In 2022, when the index hit similar levels, Bitcoin began a slow rise. The extreme cavities of fear were often an overture for magnificent rebounds. As if the market, suffered by its own fears, eventually caught his breath.
The art of buying when blood flows in the streets
Warren Buffett summed up with the sentence: Be afraid when others are greedy and gourmet when others are afraid.
Maxim, which applies to the letter to the maximum that annoying investors pay. Today, with an index of fear and greed at the lowest level, these strategists will pull out their checkbook. Their reasoning? Generalized panic creates undervalued opportunities.
Evidence of past cycles. In January 2023, when the index approached 10, Bitcoin jumped by 40 %in two months. Same scenario in July 2022: Oppression of 25 % after fear cavity. The data is stubborn: the best returns are often born in discomfort.
But beware of false hopes. If Bitcoin seems to be suspended to $ 84,700, nothing guarantees an immediate reflection. In 2018, the index remained in the red zone for 11 months. Key? Distinguish rational fear (as macroeconomic risks) from irrational panic. Balance exercises where patience and discipline are queens.
Bitcoin, Market Phoenix
The current panic is not over, but the ceremony of the passage. Bitcoin, accustomed to these emotional cycles, has overcome the very worse crisis. The fact remains that this autumn brings two key lessons.
First, the importance of understanding emotional indicators – these mirrors of our own excesses. Then need to think outside the herd. Because in the crypto arena, profits often capture where others do not look.
For investors it is time in the blood. Instead of panic waves, monitor the foundations (institutional acceptance, half, technical innovation) than panic waves. And remember: Even the darkest nights will end and retreat. Bitcoin has already shown that he knew how to be born from his ashes. Will Solana does the same despite a decline in 41 %?
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Evariste, fascinated by Bitcoin since 2017, has not stopped documenting on this topic. If his first interest focused on trading, he now tries to actively understand all cryptocurrency progress. As an editor, he tries to permanently provide high quality work that reflects the condition of the sector as a whole.
Renunciation
The words and opinions expressed in this article are involved only by their author and should not be considered investment counseling. Do your own research before any investment decision.