Many traders lament that they didn’t buy Bitcoin when it was only worth a few cents. Others complain that they sold too early, buying at a few cents and selling when it was a few hundred dollars. Even that’s a massively profitable trade, but what if they had waited until it was north of $65,000?
The common sentiment is that, when Bitcoin is low, you should buy. And as it approaches historically low values, does that mean it’s the perfect time to buy?
Contrarian trading isn’t a new thing by any means. It aims to capitalize on sudden drops in value caused by either sudden market shifts or consumer sentiment. And as markets readjust and recover, steep droppers tend to regain their value.
However, the crypto sphere works a bit differently in that it’s much more volatile than traditional markets. A 5% daily drop in the DOW is disastrous, while a 30% decline in Bitcoin is a regular Tuesday. But even with their different natures, many agree that the Bitcoin selloff is overblown.
As BTC’s weekly average is the lowest it’s been in 200 weeks; many crypto enthusiasts are concerned. Such a drop has only occurred four other times, during the 2015 slide, in 2018-19 as the markets hit bottom, and the 2020 pandemic crash.
The commonality between all these situations is that Bitcoin has managed to persevere and reach new highs. As the leading cryptocurrency, it’s highly doubtful that BTC can stay out for any extended period. Until cryptocurrencies become more functional, they simply serve as stores of value and trading tools. Accordingly, Bitcoins is a standard bearer for all crypto, as the first and biggest one on the market.
If you don’t mind sticking with the long game, it may be a good time to invest. You may not see returns tomorrow, but recovery is almost inevitable.
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