After quite a bumpy December for crypto investors, Bitcoin dropped down even more around late January. Now it seems like the market sentiment has started to change once more.
As a matter of fact, the Bitcoin fear and greed index, which was once close to 10 as the price dropped down to the $35k range, is now slightly higher at 37.
Bitcoin Fear and Greed Index Now at 37
With the price of BTC above the $41k mark, the market sentiment has finally improved. This means that it has gone from extreme fear to just fear. However, this does not mean that it can be assumed that the market is back on its bullish trajectory since the market sentiment has not yet transitioned to greed.
As tweeted by BitcoinFear, Bitcoin is now at 37 over 100, which means it would need just a little more before the market goes back to neutral. The big question as of writing is whether BTC will be able to hit $100 or if more hodlers will start taking profits.
Bitcoin Fear and Greed Index is 37 - Fear
— Bitcoin Fear and Greed Index (@BitcoinFear) February 6, 2022
Current price: $41,402 pic.twitter.com/BRYXtgLMfJ
How can the Psychology of a Market Cycle be Applied
Despite crypto being different from most markets, the fundamentals of the "psychology of a market cycle" can still be applied. As seen on steemit, the market is still within its fear state.
As of writing, it has yet to be seen whether not the market is still doubling down or if it has already reached a state of depression.
The main concept of trading, investing, and holding assets is to buy low and sell high. The market's psychology, however, makes things a bit different
This is because people are buying when the price is high becauuse they believe that the price can go higher. Likewise, people sell when the price is low because they fear that the price may go ever lower than it already is.
'Why 95% of Traders Lose Money and Fail'
Although the Bitcoin fear and greed index has been able to slightly recover, it remains to be seen whether this is yet another bull trap or if the market has finally settled.
With newer traders and investors in the market thanks to last year's crypto boom, it can be said that there may be some of them that do not understand the market cycle. This, in return, saturates the highs and the lows.
In addition, an article by Cointelegraph tackles one of the puzzling questions as far as the crypto market is concerned, which is why 95% of traders lose money and eventually fail.
According to Cointelegraph, one of the reasons for this around "80% of all day traders quit within the first two years. 40% of all day traders likewise end up trading for just one month.
Data also shows that within three years, only 13% of day traders continue to do so. This reduces to just 7% after five years.
Cointelegraph further states that "the average individual investor underperforms a market index by 1.5% per year."
The article also adds other factors that can explain why traders lose money and eventually fail, which include how active traders underperform every year by 6.5% and how those with a decade's worth of negative track record still continue to trade.
Related Article: Activision Blizzard Earnings Dropped by 18% at Just $2.49B, Falls Short of Wall Street Expectations
This article is owned by Tech Times
Written by Urian B.
