Could Bitcoin’s price be poised for a price increase despite the most adverse reaction on Twitter?
With Bitcoin’s price plummeting by more than $3,000 in just a few days and hitting a multi-week low, new research reveals that public opinion is overwhelmingly negative. However, similar occurrences have, in the past, turned out to be indications for local bottoms. Thus the issue is whether history will repeat itself.
Is It Possible That Low Sentiment Is a Good Thing?
At the end of June, Bitcoin attempted to break over $37,000, but it was immediately rejected, and the price fell in the days that followed. Despite a somewhat promising start to July, when BTC tried another breakthrough, the asset has lost almost $5,000 in value since June and has now hit a three-week low.
Naturally, these negative occurrences have influenced investors’ attitudes and perceptions of the significant cryptocurrency. According to data from the analytics platform Santiment, general Twitter sentiment toward Bitcoin “remains negative,” with most comments anticipating more substantial price drops ahead.
However, as the graph above shows, the price of BTC tends to move in the opposite direction of public opinion. For example, in early January, when BTC had achieved a new all-time high, the audience was primarily hopeful, but it rapidly retraced. Conversely, Bitcoin went on a fantastic run once the community began its criticism, reaching a high of $65,000.
As a result, Santiment determined that the present negative position indicates that a price resurgence is more likely to catch the market off guard.
Negativity, according to Ear and Greed, also reigns supreme
While the data from Santiment above depicts Twitter sentiment, the Fear and Greed index depicts a larger picture. It analyses different sorts of data, including volatility, polls, and volume, in addition to social media conversations, to determine whether the overall attitude toward Bitcoin is favorable or negative.
The measure displays the final results on a scale of 0 (severe dread) to 100 (complete terror) (extreme greed). Thus, it confirms the previously stated narrative since it depicts a climate of “severe dread” that has dominated the market for several weeks. In reality, the index has just recently begun to decline, presently sitting at 15, down from a high of 20 last week.
Recent price fluctuations influence it, but history suggests that BTC has performed well when the index has been in a profound state of anxiety for a long time.