Crypto Reset: Why the Sell-Off Yesterday Might Be Your Next Chance to Invest

Has the sell-off yesterday produced any positive news? It would seem so.

First, we are no longer in the “Extreme Greed” category on the majority of Fear and Greed indices. You may view the CMC index below.

This suggests that if you think the market’s bull run will continue, now would be a good moment to begin dip buying.

Image depicting the CMC Fear and Greed Index at 69 — firmly outside of the 80+ “Extreme Greed” zone.

Furthermore, according to the Bitcoin Sell-Side Risk Ratio, we have not yet reached a stage when the price of $BTC has increased excessively or too rapidly.

In essence, this determines whether an excessive number of holders are profiting by adding up all on-chain gains and losses and dividing that total by realized gains.

The “extreme profit” phase is indicated by the blue line, and “seller exhaustion” is indicated by the red line. We are currently in an excellent position based on this criteria.

Image of $BTC Sell-Side Risk Ratio depicting current levels in the acceptable range.

The “hawkish cut” from the Fed hurt cryptocurrencies. The CMC Altcoin Season Index consequently shows a somewhat favorable stance in favor of alts, reading 51 out of 100.

When this index was not reading favorably for alts, the majority of the recent increases for alts occurred. Once more, this reset signals a chance for the bold to buy.

This leads me to my last timing point. I would wait a day or two even though there are deals available.

The $BTC 25 Delta Skew shows how hopeful or pessimistic options traders are. In the past, the price of $BTC has decreased if it reads higher than 10%.

At 12.3% right now, traders are placing bets on a recovery. That is a crowded trade that is unlikely to succeed, based on historical data.

Image of the $BTC 25 Delta Skew, which read 12.3% currently.

In conclusion, it is a good moment to think about purchasing if you have extra money. Nevertheless, such opinion is held by far too many individuals, especially now.

I would hold off on putting cryptocurrency in my shopping basket for at least another day.

Cheers to trading!

Crypto Reset: Why the Sell-Off Yesterday Might Be Your Next Chance to Invest was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.