- According to a survey, 55 percent of investors are sticking to their crypto investments despite the sharp downturn
- The main concerns among the respondents are rising inflation, the state of the world economy and international conflicts
- Bitcoin is in oversold territory, which signals a good buying opportunity according to MVRV Z-Score
The crypto and stock markets are in decline, and apart from the positive news that Celsius was able to pay off all its debts and avoid a massive liquidation, there are few reasons why investors buy Bitcoin (BTC) and altcoins right now.
The collapse of several DeFi protocols and crypto-mutual funds, as well as the fact that BTC is 60 percent below its record high level, continues to weigh on the mood. However, some positive data may be a sign that the market is ready to consolidate.
expects people to shift from a comatose state of fear to the realization that tens of billions of billions of $ in forced spot sales (LFG, 3AC, lenders, miners) were a capitulation / risk transfer that only competed with the Covid crack https: // / t. co / vAj7HfTKxf
– light (@lightcrypto) July 7, 2022
Crypto-investors should HODL
According to a recent survey by Appinio, despite the collapse in crypto prices and the beginning of the bear market, “more than half (55 percent) of crypto investors have kept their investments and only 8 percent have sold their investments.”
This suggests that the majority of crypto investors continue to believe in investing in crypto. The survey also shows that “33 percent of U.S. investors have invested in cryptocurrencies” and “40 percent of investors believe Bitcoin is the best investment opportunity over the next three months.”
US investors are resilient
Appino also wanted to know how US investors are reacting to the general downturn in the financial markets. It turned out that 65 percent of respondents stick to their investments and are still confident in their decision.
When asked about their biggest short-term concerns, 66 percent mentioned rising inflation, 39 percent the state of the global economy and 34 percent international conflicts.
According to Callie Cox, US investment analyst at eToro, the same concerns combined with persistent uncertainty “and a general rise in the cost of living and housing” have created a “perfect storm of setbacks” for investors.
“Despite these factors, investors of all generations show a degree of maturity and understanding and do not let their emotions control them when making important money decisions.”
Bitcoin in oversold territory
In addition to the resilience of crypto investors, several indicators on the chain also suggest that the market may be oversold and a period of consolidation underway.
MVRV Z-Score uses a combination of Bitcoin’s market value, realized value and Z-score. This has proven to be a reliable tool for determining when BTC is “extremely over or underestimated compared to its fair value,” according to LookIntoBitcoin.
As seen in the chart above, periods when the red Z-score entered the bottom green area represented good buying opportunities for BTC. Equally good opportunities were phases where the market price fell below the realized price, which is indicated by the blue and yellow lines in the chat.
LookIntoBitcoin’s Bitcoin Investor Tool also provides insight into when buying or selling Bitcoin can yield above-average returns.
The green shaded areas on the chart are periods when the bitcoin price is at levels that are considered to be historically low and may constitute a good buying opportunity.
It should be noted that for the Bitcoin Investor Tool and the MVRV Z-Score, the bear market period varies and may last longer. It is therefore advisable for investors not to base their investment decisions solely on one indicator.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trade involves risk and you should do your research before making a decision.
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