The Bitcoin Market Enters a Panic Zone

As BTC/USD wandered beneath 20k, the market started to panic, signaling that a good buy opportunity might be developing.

Bitcoin has continued a correction after sailing past former highs at the start of November 2021.

BTC is presently trading at about $19,087, which is approximately 27.66% of its unparalleled high of $69,000 recorded on November 10, according to coingecko.

Chart by TradingView

The recent bitcoin price drop is a below-average percentage for BTC this year.

Whenever price drops occur, novices get panicky while those who hold Bitcoin for the long term enjoy buying the dip and piling on additional cheap satoshis.

The problem of most amateurs is due to their short-range dream of becoming a millionaire, usually generated by a sort of desire for immediate gratification. I call this short-timers syndrome. In contrast, however, long-term Bitcoin investors will keep acquiring more BTC as the price plummets.

This relationship and contrast are part of humanity — a sort-of double-edged sword of allowing emotions to control our activities. In addition, utilizing emotion in your investments can be counterproductive, and the best strategy is just to chill and HODL.

Equipped with comprehensive familiarity with Bitcoin and a knowledgeable past of BTC’s volatility, Bitcoin Veterans, who have been part of the community throughout all the hurdles, aren’t affected by the extreme fear that price plunges will crash the market.

Bitcoin Veterans profit from it.

Bitcoin Veterans are the earliest to react and “buy the dip” because they understand that the price trend has constantly climbed whenever bitcoin crashes.

A great tool to determine market response is the bitcoin Fear & Greed Index.

When potential investors are frightened, an excellent buying opportunity may arise, and the correction might be ending soon.

On the other hand, when potential investors are too selfish, a correction could be starting to end the price rise.

A value of zero represents “excessive panic,” while a value of 100 signifies “excessive selfishness.”

Chart by the bitcoin Fear & Greed Index

The validity and precision of this index and whether it can serve as a price prediction tool are certainly up to discussion.

Still, the bitcoin Fear & Greed Index has underlined some fascinating connections and can help potential investors keep their emotions out of the way and identify opportunities.

At the time of writing, the index showcased panic in market reaction, with a score of 20, as Bitcoin dropped below $18,112 on September 12, 2022.

Historically, when major downward trends occurred and market reaction plunged, the index touched down single-digit points, for example, in March 2020 and May 2021, respectively.

Both times saw a collapse in price that essentially destroyed the faith of most investors.

However, Bitcoin didn’t die on both occasions and hadn’t died on any other occasion, a fact that echoes amongst the Bitcoin Veterans and the reason for their slogan to “buy the dip.”

The takeaway

There is no best point in time for buying Bitcoin.

For instance, those who wait for a dip might miss the bus while Bitcoin realizes double-digit profits for several months, and, on the other hand, those who instantly buy might see prices crash for a short time.

The point is, long-term, it doesn’t matter when you bought Bitcoin but only whether or not you did.