Various metrics show that social and business sentiment remains low for Bitcoin, despite the fact that the price fell over $ 11,000 a few hours ago.
The on-chain analytics provider, Santiment has shown that Bitcoin-weighted social sentiment has hit its lowest level in two years. The metric takes into account the total volume of mentions of Bitcoin on Twitter and compares the ratio of positive and negative comments on the platform.
Social sentiment rose sharply a few months ago when Bitcoin began its strong recovery in mid-March after the market crash triggered by the pandemic. However, during most of May, June, and July when the asset consolidated in the low $ 9,000 area, it fell back into negative territory.
The analytics firm found that Contrary to intuition, negative sentiment at extremely low levels correlates with price increases, while extreme highs correlate with price reversals.
2) the ratio of positive to negative comment on the platform. In general, extremely low sentiment negative correlates with price increases, while extreme highs correlate with price decreases. Read how we calculate the mood in our academy using the link above.
– Santiment (@santimentfeed) September 16, 2020
2) the relationship between positive and negative comments on the platform. In general, extremely low sentiment negative is correlated with price increases, while extreme highs correlate with price reversals. Read how we calculate the mood in our academy using the link above.
Bitcoin hit a high of $ 12,400 in 2020 in mid-August, but hasn’t exceeded its 2019 high of $ 13,800, leading several analysts to claim that the lowest high in the long period suggests we are not yet in a bull market.
Another indicator of market sentiment is that Fear and greed index Bitcoin, which as of this writing has a neutral value of 48. This metric is based on a combination of factors such as market volatility, momentum and volume, social media interaction, market dominance and current trending.
For most of August, the index was in the “extreme greed” zone around 80 as Bitcoin was trading in the high $ 11,000 area. Unsurprisingly, the lowest levels were reached in March and April, when “extreme fear” hit world markets.
The popular charting platform Tradingview also has its own sentiment indicators for assets derived from a range of technical indicators. In the daily and weekly views They show buy signals while things are more neutral in shorter periods of time.
Bitcoin, however, has been largely correlated with stock market movements for much of this year The “September Effect” is a term that came up because it is a historically weak month for the stock market and cryptocurrency price profitability (as Kraken noted in its most recent update). According to Santiment, this could be reflected in the social mood.
At press time, Bitcoin was still trading above $ 11,000, up 2.8% on the day and nearly 8% on the week.