The Crypto Market Is Bleeding Due To Increasing Pressure From The SEC, Is It Time To Buy?

The crypto market seems to have reached a turning point, where regulatory pressure across the sector is causing prices to suffer. This ranges from the United States Securities and Exchange Commission (SEC) suing Binance and Coinbase exchanges as well as the Ripple case heating up. These factors have led to a sharp drop in prices, which may present a unique opportunity to get into the market.

Crypto Market Bleeds Red

The days following the increased regulatory scrutiny on the crypto market have not been easy. Hence, most of the digital assets in the space are now suffering massive losses. An example is bitcoin, which is currently the market leader.

Bitcoin lost its footing above $26,000 which was acting as a support for the bulls. However, sellers continue to control the market and this selling pressure has been on the rise since last week, making any recovery impossible. BTC is now back in the $25,000 area after falling 2.30% last week.

The second largest cryptocurrency by market cap Ethereum has also followed the same trend and is performing worse than Bitcoin on the weekly charts where it is seeing a loss of 6.07%. The decline brought the price below the $1,750 support as the bulls struggled to hold it.

BNB has been the only coin in the top 10 to perform reasonably well with a gain of 5.12%. However, this recovery has raised questions about whether Binance is dumping its BTC in order to prop up the price of BNB after going freewill following the SEC lawsuit.

Others such as XRP, DOGE, TRX, ADA, and MATIC are all nursing losses over the past week as well, with ADA and MATIC performing particularly poorly with double-digit losses on their 7-day charts.

Is it time to buy blood?

‘Contrarian investing’ is a school of thought that states that the best time to get into an asset is when its price is falling and investors are fearful of getting into the market. This is explained by the popular investment adage that says “Buy when there’s blood in the streets.”

Total market cap still holding steady above $1 trillion | Source: Crypto Total Market Cap on TradingView.com

Looking at the current market trend, most of the assets in this sector are in the red, and the contrarian investing shows that this is the best time to start investing in the market. This is made even stronger by the fact that crypto fear and greed index Fear is moving back into the zone, which means fewer investors are willing to put money into the market right now.

If this happens to be a local bottom, it would be a good point to buy the cryptocurrency as from here another bull rally could see bitcoin reach $35,000. This would mean a 50% upside for investors from here.

As for the crypto market, it is still above the $1 trillion mark at this point, indicating that there is still some strength from the buyers.