According to crypto sentiment platform Santiment, bottoms within the crypto market are unlikely to form at times when many analysts and traders are calling for them.
“Be cautious as a general consensus emerges around a selected price bottom,” Santiment said in a report on Saturday, adding that “real bottoms often emerge when the bulk expects further price declines.”
Santiment said this recently became a trending topic on social media after Bitcoin (BTC) briefly fell below $95,000 on Friday amid a general decline in tech stocks. “This suggests that many traders imagine the worst is over,” Santiment said, arguing that such sentiment has often been followed by one other downtrend previously.
Crypto market participants often claim that the market has bottomed when psychological price levels are broken, resembling when Bitcoin falls below $100,000.
Bitcoin sentiment plummets, with positive comments falling to their lowest level in a month
Despite the underside statement, outstanding figures resembling BitMEX co-founder Arthur Hayes and BitMine Chairman Tom Lee have recently reiterated their predictions that Bitcoin could still rise to $200,000 or more by the tip of the yr.
Santiment said sentiment on social media had develop into “overwhelmingly negative.” Source: Santiment
Santiment also noted that the ratio of positive to negative comments on Bitcoin is at its lowest level in over a month.
“As Bitcoin’s price fell, its social dominance rose to over 40%, showing that it’s the principal topic of a really scary discussion,” Santiment said.
The sentiment platform added that many traders attributed the recent Bitcoin price drop to Strategy Chairman Michael Saylor's selling of Bitcoin, with mentions of “Saylor” surging on social media as Bitcoin fell.
Spot Bitcoin ETF outflows may very well be bullish
During an interview with CNBC on Friday, Saylor denied reports that the corporate had dumped a few of its Bitcoin amid a sudden drop within the asset's price.
Meanwhile, Santiment said that the numerous outflows from spot Bitcoin ETFs recently may very well be a positive sign for the spot price of Bitcoin.
“Large ETF inflows have often marked local price peaks, while significant outflows have coincided with market bottoms, suggesting retail panic,” Santiment said.
According to Farside, US-based spot Bitcoin ETFs recorded $1.17 billion in outflows within the last three trading days.
On Thursday, spot Bitcoin ETFs recorded net outflows of $866 million, marking the second-worst day on record after each day outflows of $1.14 billion on February 25.
