Bitcoin Plunges to Panic Levels, Analysts See Buying Opportunity

Bitcoin and the broader cryptocurrency market experienced a significant downturn today, with the Fear and Greed Index plummeting to an extreme level of panic selling. The index, which measures investor sentiment, dropped to 10, lower than even during the collapse of the crypto exchange FTX.

Bitcoin, the world's largest cryptocurrency, plunged below $83,000, marking a 25% decline from its January peak. The sell-off was accompanied by a surge in trading volume, with $1.3 billion worth of BTC deposited into exchanges, indicating heightened anxiety among traders. Daily trading volume fell by 17% to $68 billion, while futures open interest dropped by 6.3% to $53.6 billion.

Analysts have urged investors to remain calm despite the massive sell-off. Corrections of 30% or more are common in Bitcoin's bull cycles, and the cryptocurrency is now testing its 200-day moving average with its RSI in oversold territory, often signaling a potential rebound. CryptoQuant's Ki Young Ju reminded traders that BTC dropped 53% in 2021 before surging to an all-time high, warning against selling when prices fall.

Veteran investor Robert Kiyosaki sees Bitcoin's crash as a buying opportunity. He attributed the downturn to systemic issues in the global financial system, such as America's mounting debt and unsustainable spending. He remains bullish on Bitcoin, gold, and silver as hedges against what he calls "fake money."

Bitcoin's decline came after former US President Donald Trump announced a 25% tariff on the EU, triggering a $500 billion wipeout in the S&P 500 and exacerbating market fears. Despite the panic, analysts believe Bitcoin's pullback is part of its natural bull cycle, and deep corrections often precede strong rallies.

Investors are now more fearful than during the FTX collapse, fueling extreme volatility in the crypto market. However, analysts advise that this could present a buying opportunity for those looking to enter the market. February has historically favored Bitcoin, and many analysts see this as a potential buying opportunity.