Death Cross Is Here. Bitcoin Goes Below $40K. Is It Time To Panic?

It's time to ask yourself the right questions.

This beginning of the week, and more generally this beginning of the year, must not start as you would have expected for Bitcoin. After dreaming for a long time of the $100K mark for the end of 2021, the price of Bitcoin has just dropped back below $40K as I write this.

A low of $39.6K has just been hit.

It's in these moments of extreme fear that you need to ask yourself the right questions. Are you scared? Stressed? Excited? Happy? Sad? Confident? Answering this question honestly will give you a better sense of where you stand in terms of your level of confidence in the Bitcoin revolution.

This weekend I was amused to see that extreme fear (Bitcoin Fear & Greed Index at 10) was dominating the market on January 8, 2022, when the Bitcoin price was $41.6K. You might wonder why I was amused. After all, watching the price of Bitcoin fall is not funny at first glance.

It is when you realize that a year ago to the day, the price of Bitcoin was also $41.6K, but the market sentiment was euphoria:

Same price, but opposite feelings. The reason? Most investors have a hard time stepping back and realizing that in March 2020, the price of Bitcoin bottomed out below $4K during the liquidity crisis at the beginning of the COVID-19 pandemic.

BTC reserves on exchange platforms are at a 4-year low. Why won't the supply shock have the desired effect on the Bitcoin price?