This week has been great for the crypto market as compared to the previous ones. Bitcoin and other cryptocurrencies have fared really well in the timeframe. However, the crypto market sentiment still reeks of fear among the investors. Analysts are trying to make some sense out of this situation where the market is surging despite investors being frightened but are we on the road to recovery?
Some analysts say that this is a ‘classic disbelief phase’ which will lead to market recovery and stability in the long run. Stock markets across the world are cyclical and so is the crypto market. There is an alternate trend of growth and decline. This trend defines the market sentiment for the investors.
‘Frightened’ crypto market sentiment- A cue for better things to come?
Whenever the market booms and has crossed all expectations, investors become excited and start investing more. They are unable to see the impending collapse. Hence their excitement ultimately becomes the reason for their losses. Similarly, when the market has hits rock-bottom, investors are afraid to put in their money to buy assets and miss out on the golden opportunity.
This classic disbelief phase has made the investors convinced that the stock market will still go down. Despite the fear in the crypto market sentiment, there are some investors that have sensed the opportunity. When the crypto market takes off, they will be the ones making massive gains.
Why the crypto market sentiment still reeks of fear?
It is obvious that the investors who invested when the market was at its peak have taken a huge hit. That hit has caused complete disbelief that this market will ever recover but as history tells us, the markets always recover.
Bitcoin went down to $3000 range before it started recovering and is now at $7000. Despite the fall, there were some investors who swooped in at $3000 and have doubled their value.