Panic Mode? What a Wall Street Chart Tells Us About #Bitcoin’s Price
Investing in financial markets can be an emotional roller-coaster and the bitcoin market is no exception. When it comes to investment, human emotions tend to oscillate between two extremes – fear and greed – and the constant balancing act between the two creates a cycle of market emotions. For years, traders and investors alike have studied the cycle of market emotions with the help of a chart known as the “Wall Street Cheat Sheet.” As seen above, at the top of the market cycle is “euphoria” – a point of maximum financial risk.This is the time when investors think nothing can go wrong and a self-feeding cycle is established: more investors enter the market for its stellar returns, leading to a further rise in price and valuations reach dizzying heights before, eventually, reality bites hard.The cryptocurrency market was gripped by euphoria in the last quarter of 2017. Bitcoin prices rose from $6,000 to $20,000 within seven weeks on speculation that futures launch would open floodgates for large institutions to buy cryptos.Further, every other altcoin, regardless of its fundamental story, had rallied to record highs by the first week of January. Most pundits came out with bitcoin targets of $50,000 or more at the time.The bubble, however, was pricked just two weeks into January by a regulatory crackdown in China and South Korea – two of the biggest sources of demand for cryptocurrencies back then.
Bitcoin (BTC) is down 1.33% over the past 24 hours and is currently trading at $3,444.18 on Coinbase. BTC dominance is continuing to rise and is currently at 55% and the total cryptocurrency market cap is currently at $109 Billion.