How Extreme Fear In Crypto Correlates With Bitcoin Bottoms

Tony "The Bull" Severino

1 year ago

3 mins read

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The crypto market is in full fledged fear for the longest phase in more than a year, coinciding with a massive Bitcoin drop of more than 50%.

The once trending cryptocurrency has yet to recover, leaving the market and participants in a state of extreme fear. But past data shows, fear is often a good thing for Bitcoin, and helps the asset find support and at least a short term bottom.

Bottom Things: Bitcoin Price Action Perfectly Correlates To Fear And Greed

Fear is one hell of an emotion and can make even so-called “diamond hand” Bitcoin holders panic sell. No emotion comes close to driving humans toward acting irrationally more so than fear, other than greed.

Greed can be even worse, blinding investors and traders to what’s going on around them. When money is easy, it is difficult to click that sell button and secure profit knowing that prices could rage on much higher.

The two emotions are almost never in balance when it comes to markets, which makes changes from one extreme to another especially notable.

Several investing legends have made their names and built their reputations based on contrarian positions, and there’s a reason for it that couldn’t be any more obvious than comparing the crypto market Fear and Greed Index with Bitcoin price action.

Fear and green correlates well with tops and bottoms | Source: BTCUSD on TradingView.com

The One Simple Trick To Regular Crypto Investing Success

Be fearful when others are greedy and greedy when others are fearful. Buy the blood in the streets. All of these famous finance quotes directly reference contrarian trading. Why then, can’t anyone simply just control their emotions, and buy when things get scary and sell when others are screaming on social media about their gains?

The crypto market Fear and Greed Index compared with Bitcoin price action shows just how this “one simple trick” actually works and can make you rich. Yet it is still extremely difficult to pull off.

Related Reading | Five Signs That The Bitcoin Bottom Is In

The fact is, no one knows at the moment, and although it looks obvious in hindsight, things could truly go either way. What being greedy while others are fearful and being fearful when others are greedy does, is improve the chances of success.

Markets reverse when things are at their best or worst, and always when participants least expect it. By learning to alter your thinking, traders can also learn to control these two critical emotions. This is also why in technical analysis, sticking to the strategy is most important.

By doing so, even if emotions arise, there’s a plan to fall back to and reasoning to back up why you took the position in the first place: because fear sometimes equals bottoms in Bitcoin.

Featured image from iStockPhoto, Charts from TradingView.com

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

Tony is also celebrated for his literary contributions to the field. He is the author of the highest-rated Crypto Trading Journal on Amazon.com, a testament to his ability to communicate complex trading concepts in an accessible manner. This journal is widely regarded as an essential tool for traders aiming to track their progress and refine their strategies.

Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.

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