• Bitcoin price has been hovering around the $23,000 and $22,000 area.
• Traders and investors are not confident about the crypto market’s future and predicting a correction ahead in Feb.
• However, on-chain data platform Santiment claims that when most traders have a negative stance towards crypto, it leads to less selling pressure and more buyers.
Crypto Market Correction Suspected
Bitcoin price has been fluctuating lately, with the King currency opening on a brighter note but ending on a bearish trend as it dropped towards $22,000 level. At the time of writing, Bitcoin is valued at $22,826 with a fall of 0.42% over the last 24 hours. Despite starting 2021 on a bullish cycle with its value gaining more than 45%, traders and investors remain skeptical about the fate of cryptocurrencies in February due to market corrections being predicted.
Cognitive Dissonance
Technical analyst Adrian Zdunczyk (aka Crypto Birb) believes that the crypto market is currently in “disbelief mode” due to fear of missing out on profits or getting caught in a market correction; this cognitive dissonance causes traders to give too little weight to recent reversals. However, Santiment data suggests that when most traders are pessimistic about Crypto’s future, it creates less selling pressure and more buyers which could potentially lead to an increase in demand for cryptocurrencies and their prices recovering once again.
Positive Signs
While there is still uncertainty surrounding the fate of cryptocurrencies this month, there have also been positive signs indicating potential growth ahead. Ethereum recently hit an all-time high of over $1750 per coin while Ripple (XRP) showed signs of recovery after its recent dip below 30 cents per coin; these developments suggest that there may be hope yet for cryptocurrency markets even if corrections occur this month.
Risk Management
As always with investing in volatile assets such as cryptocurrency markets it is important to practice risk management strategies such as diversifying investments across multiple coins or using stop loss orders to minimize losses if prices do drop unexpectedly during periods of corrections or other market movements; these strategies can help protect against potentially large losses should something unexpected happen in February or beyond.
Conclusion
The crypto markets have seen some volatility recently which has caused many investors concern about what might happen next month; however there are also positive indicators suggesting potential growth ahead despite some predictions for corrections this month. Investors should practice risk management strategies like diversification and utilizing stop loss orders in order to protect themselves from any unexpected downturns should they occur