Why Crypto Market Sentiment May Present A Unique Buying Opportunity

The sentiment in crypto markets has not seen any improvement during the past couple of months. Although it appeared that the worst was behind us, the market has plunged back into extreme fear. There may not be the typical doom and gloom market that is associated with these markets, but investors who are looking to invest at favorable prices might find an opportunity.

The Right Time to Buy

The history of cryptocurrency has shown that there were times when it was easier to buy cryptocurrencies than others. There have been periods when the market was in extreme fear and the momentum is very low.

At times such as these, investors are cautious about investing in digital assets. The result is that the prices of those assets can drop. This can be a selling opportunity due to the lower prices and reduced volume required to move the market. 

Crypto total market cap chart from TradingView.com

The total market cap has fallen to $851 billion. Source: TradingView.com Crypto Total Market Capital| Source: Crypto Total Market Cap on TradingView.com

A prime example is mid-2020, just before the bull trend began. After spending the majority of March and April in extreme fear, the crypto market was finally able to recover. A market rally would ensue that saw bitcoin finally break $10,000. That’s more than 90% increase over its March 2021 levels below $4,000.

Crypto Market Could See A Recover

The FOMC meeting is putting the stress on crypto markets. These are historical events that have always had an impact on the macro markets and bitcoin’s high correlation with the stock market has seen it decline during this time too. There could be an opportunity to turn the tide.

Due to the high inflation rate, the Fed has increased interest rates since a while. The Fed cannot keep this up for very long. There will soon be an end to it. If this occurs, risk assets such as bitcoin will respond positively.

“Rich Dad Poor Dad” author Robert Kiyosaki forecasted that this change would come about in early 2023 and that the dollar would decline in value. This would lead to investors fleeing to digital assets, such as bitcoin. Kiyosaki has encouraged them to invest in the asset.

Featured Image from Finance Monthly. Chart from TradingView.com

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