The cryptocurrency market appears to have reached a critical turning point as prices are suffering due to regulatory pressure across the space. This ranges from the US Securities and Exchange Commission (SEC) suing the Binance and Coinbase exchanges, as well as the heated case of Ripple. These factors have led to a sharp drop in prices, which may provide a unique opportunity to enter the market.
The cryptocurrency market is bleeding red
The days following intense regulatory scrutiny have not been easy in the cryptocurrency market. As such, most of the digital assets in the space are now incurring heavy losses. One such example is Bitcoin, which is currently the market leader.
Bitcoin lost its footing above $26,000 which was a support for the bulls. However, the sellers retain control of the market and this selling pressure has steadily mounted over the past week, making any form of recovery impossible. BTC is now back in the $25,000 region after dropping 2.30% in the past week.
The second largest cryptocurrency by market cap Ethereum also followed the same trend and performed worse than Bitcoin on the weekly chart seeing losses of 6.07%. This decline has taken its price below the $1,750 support as bulls are scrambling to hold onto it.
BNB was the only reasonably well-performing top-10 token with a gain of 5.12%. However, this recovery has raised questions about whether Binance is abandoning BTC to support the price of BNB after it entered at will following the SEC lawsuit.
Others like XRP, DOGE, TRX, ADA, and MATIC are all nursing losses over the past week as well, with ADA and MATIC performing particularly badly with double-digit losses on the 7-day charts.
Is it time to buy blood?
“Adverse investing” is a school of thought that states that the best time to get into an asset is when its price is falling and investors are afraid to enter the market. This is explained by the popular investment saying “buy when there is blood in the streets”.
Total market cap still holding steady above $1 trillion | Source: Crypto Total Market Cap on TradingView.com
Due to the current market trend, most of the assets in the space are in the red, and contrarian investing may indicate that this is the best time to start investing in the market. It is further cemented by the fact that Crypto Index of fear and greed It goes back into the fear zone, which means that fewer investors are willing to put money into the market right now.
If this happens to be a local bottom, it would be a good point to buy cryptocurrencies as another bullish rally from here could see Bitcoin reach $35,000. That means a 50% increase for investors from here.
As for the cryptocurrency market, it is still holding above the trillion dollar mark at this point, which shows that there is still some strength on the part of the buyers.