August 5, 2021

Negative Sentiment on Crypto Twitter Peaks Again: History Shows This Could Be Bullish

2 min read

With bitcoin’s rate losing more than $3,000 in days and reaching a multi-week low, the crowd belief remains primarily unfavorable, reveals current information. Nevertheless, comparable developments have turned out to be signals for local bottoms in the past, and the question remains if history is to duplicate itself.

The Sentiment is Low, But Could That Be Good?

Bitcoin tried to break above $37,000 at the end of June, but it was quickly turned down and headed south in the following days. Despite the reasonably positive start of July when BTC attempted another breakout, the property has really lost more than $5,000 of worth given that June and reached a three-week low earlier today.

Naturally, these unfavorable advancements have actually impacted investors’ basic feelings and method towards the main cryptocurrency. Data from the analytics resource Santiment reveals that the overall Twitter belief toward Bitcoin “remains unfavorable,” with many comments anticipating more price slumps concealed around the corner.

Crypto Twitter Sentiment on Bitcoin. Source: Santiment
Crypto Twitter Sentiment on Bitcoin. Source: Santiment Nevertheless, BTC’s rate in fact tends to perform in the opposite instructions of the general belief, as the chart above demonstrates. For instance, the crowd was mainly positive in early January when BTC had actually reached a new all-time high, however it rapidly retraced. As soon as the community resumed the negativity again, bitcoin went on an impressive run leading to tapping $65,000.

As such, Santiment concluded that the current negative state means, “there is a greater degree of a price increase to capture the crowd off guard.”

Fear and Greed Also Says Negativity Rules

While Santiment’s data from above programs the Twitter sentiment, the Fear and Greed index shows a more macro photo. Apart from social media conversations, it computes numerous types of data, consisting of volatility, studies, and volume, to identify whether the general mood is positive or unfavorable in regards to bitcoin.

The metric presents the outcomes from 0 (severe fear) to 100 (extreme greed). It really supports the previously mentioned narrative as it shows a state of “extreme worry,” which has controlled the market for a couple of consecutive weeks. In fact, the index has only decreased recently as it’s now at 15, while last week was at 20.

It’s likewise quite affected by the most recent cost motions, but history shows that BTC has responded well when the index was so long in a deep state of worry.

Fear and Greed Index. Source: Alternative.me
Fear and Greed Index. Source: Alternative.me