Why You Should Not Buy Yet in this Crypto Winter
However, this could not be the right time for big players in the market, especially the mainstream and hedge fund managers to buy due to the following reasons:
The present forecast supports further dips
It will not be a wise investment decision to buy now when there are forecast from known analysts in the industry that the market is going further dips. In recent days, we have seen the market capitalization of the Cryptocurrency market going down steadily. A little delayed purchase could make an investor to buy more with the same amount in the coming days.
Only a few cryptocurrencies have a positive change in price when compared to the trading volume
One of the confluences that must be considered before trading a coin/token is the volume of trade with respect to price. When the price is diminishing and the trading volume is positive, we should then wait. This is because it is an indication that we have more sellers than buyers. Taking Bitcoin as an example, it's the volume of trade has increased by 37.4% in the past 24 hours while its price has reduced by 5.94% within the same duration. More sellers indicate a possible decrease in price further.
The Fear and Greed Index of the market is less than 25
This means that it is still in the extreme region. Hence, buying at this point would mean taking a high investment risk at a time it could be avoided. Data available on CryptoQuant shows that Bitcoin whales are responsible for these sell-offs. Hence, retail investors could wait further until a possible reversal is deduced.
Possible negative comments from top government advisers
Crypto winter is always accompanied by negative comments from economic advisers to governments or known organizations. This is due to the reservation on cryptocurrencies' investment due to their high volatility. These comments could create further panic in the market, therefore increasing the selling pressure. This high selling pressure could lead to further dips.
In conclusion, for these valid reasons, it would be wise for a short-term investor to delay any soon purchase until a possible reversal could be attained.