Should you buy as SEC pressure causes crypto market to bleed?

The cryptocurrency market is currently facing a critical turning point where prices are declining due to regulatory pressure across the industry. This includes the United States Securities and Exchanges Commission (SEC) suing Binance and Coinbase exchanges, as well as the Ripple case gaining momentum. These factors have caused a significant drop in prices, which could present a unique opportunity to invest in the market.

Crypto Market Bleeds Red

The days following the increased regulatory scrutiny have been challenging for the cryptocurrency market. Consequently, most digital assets in the industry are now experiencing massive losses. One example is Bitcoin, which is currently the market leader.

Bitcoin lost its support above $26,000, which had been helping the bulls. However, the sellers have maintained control of the market, and this sell pressure has continued to mount over the last week, making any form of recovery impossible. BTC is now back in the $25,000 territory after falling 2.30% in the last week.

The second-largest cryptocurrency by market cap, Ethereum, has also followed the same trend and is performing even worse than Bitcoin on the weekly chart, where it has seen 6.07% losses. This decline has brought its price below the $1,750 support as bulls scramble to hold on.

BNB has been the only token of the top 10 performing reasonably well with 5.12% gains. However, this recovery has sparked questions about whether Binance is dumping its BTC to prop up the price of BNB after it went into freewill following the SEC lawsuit.

Other cryptocurrencies such as XRP, DOGE, TRX, ADA, and MATIC are all experiencing losses over the last week as well, with ADA and MATIC performing especially badly with double-digit losses on their 7-day charts.

Is It Time To Buy The Blood?

‘Contrarian investing’ is a school of thought that suggests the best time to invest in an asset is when its price is falling and investors are scared to enter the market. This is explained by the popular investing saying that says “Buy when there is blood in the streets.”

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

Given the current market trend, most assets in the industry are experiencing losses, and contrarian investing suggests that this is the best time to start investing in the market. It is further supported by the fact that the Crypto Fear & Greed Index is moving back into the Fear territory, meaning fewer investors are willing to invest money in the market right now.

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

As for the cryptocurrency market, it is still holding above the $1 trillion mark at this point, indicating that there is still some strength on the part of the buyers.

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