Santiment: “Everyone's talking about the day, which means it hasn't been achieved yet.”
Analytical platform Santiment advises investors to be especially cautious when a broad consensus emerges that the cryptocurrency market has bottomed. According to the company's experts, true lows often form when most market participants expect further price declines.
Social media is full of talk about the market day.
This topic became particularly popular on social media after Bitcoin briefly dropped to $94,000 on November 15 amid a broader decline in US tech stocks. “This suggests that many traders believe the worst is over,” Santiment notes, adding that historically, such sentiment is often followed by further declines.
Cryptocurrency market participants often declare a bottom when psychologically important support levels are lost, such as when Bitcoin falls below $100,000.
Negative sentiment has reached its peak
Santiment also noted that sentiment on social media has become “overwhelmingly negative.” The ratio of positive to negative comments about Bitcoin is at its lowest level in over a month.
“As Bitcoin's price has fallen, its social dominance has risen to over 40%, indicating it has become the focus of some very scary conversations,” Santiment says.
The analytics platform also noted that many traders attributed the recent Bitcoin price drop to sales by Strategy Chairman Michael Saylor. Saylor's social media mentions spiked amid Bitcoin's decline.
Sailor denies sales rumors
On November 14, during an interview with CNBC, Saylor denied reports that the company was selling some of its bitcoin holdings amid the asset's sharp decline in price.
Meanwhile, Santiment believes that the significant outflows from spot Bitcoin ETFs recently could be a positive sign for the spot price of Bitcoin.
“Large inflows into ETFs often marked local price peaks, while large outflows coincided with market troughs, indicating retail investor panic,” Santiment notes.
Over the past three trading days, US spot Bitcoin ETFs have seen outflows of $1.17 billion, according to Farside data. On November 13, spot Bitcoin ETFs saw a net outflow of $866 million, marking their second-worst day ever, following a daily outflow of $1.14 billion on February 25.
Source: cryptonews.net
