Capitalizing on the fear of others as a trading strategy

A little over 24 hours after publishing my previous post, the Bitcoin price action dropped from $26,000 to the $21,000 area, sparking a collective panic among cryptocurrency investors and traders.

This feeling of collective panic is part of what in the theory of psychotrading is known as the phase of fear, characterized by the emotional uncontrol and fall of fantasy projections, which end up creating an anxiety that drives most investors to exit their positions.

This collective fear within the cryptocurrency market has increased primarily because in the last 24 hours Bitcoin and alternative cryptocurrencies began to plummet in the early hours of Monday, an action that has been attributed to two of the world's largest cryptocurrency platforms have curtailed their activity as the market collapse continues apace.

The truth is that this new fall of Bitcoin to the $21,000 area, marks its lowest low in the last few months, an element that has undoubtedly raised fear in the market as it is feared that the price action will fall even further. Therefore, in view of the possibility of investors impulsively dumping their cryptocurrency, this being one of the major concerns among the main cryptocurrency exchanges.

Among the major cryptocurrency exchanges that have expressed concern over the massive withdrawals that were triggered in recent hours are Binance and the Celsius network, who in the words of their executives were forced to temporarily halt all withdrawals.

In any case, should the Bitcoin price action continue to fall, we should appeal to our strategy and risk profile for optimal management of our investments, as this can help us feel less fear of losing.

CointeleGraph Bitcoin price falls below its ‘realized price’ but is it time to buy the dip?. Link