Albert Brown
Bitcoin sentiment plunges, showing a dominant bearish narrative this week, with Santiment predicting a likely rebound to catch the crowd off guard.
The fear of a sharp Bitcoin sell-off fuels the bearish narratives that Santiment, a market intelligence firm, believes would increase the chances of BTC price rebound, potentially catching the majority off-guard.
😒 Bitcoin sentiment among traders on X, Reddit, Telegram, 4Chan, and BitcoinTalk are showing the most bearish narratives this week in a year. When the crowd shows FUD at this level, the chances of a rebound to catch the majority off guard is at its peak. pic.twitter.com/JLOhNB77n7
— Santiment (@santimentfeed) July 9, 2024
The recent analysis shows that traders expect the sales by Mt. Gox creditors and the German government to drag BTC into an early bearish period. Investors fear that with the long-awaited repayments from Mt. Gox underway, the resulting sell-off chaos could yield downward pressure, plunging prices lower.
Santiment shows that this week, the Bitcoin Weighted Sentiment dropped to its lowest level in a year, representing a peak probability for price regain.
Bearish Bitcoin Sentiment
With Mt. Gox set to distribute $9 billion in Bitcoin (BTC) and Bitcoin Cash (BCH) to creditors, the Bitcoin crowd is showing increased FUD this week. Santiment revealed that traders portray the most bearish narratives on social platforms such as BitcoinTalk, 4Chan, Telegram, and Reddit.
However, the disclosure stressed that a period of high FUD levels increases the chances of a price rebound, catching the majority of BTC traders off guard. Santiment predicts a sudden uptrend in Bitcoin price will surprise most traders inclined to the bearish narrative.
The bearish pressure follows Bitcoin’s retracement to the $53K range last week, sparking a bloodbath within the crypto scene. Bitcoin traders’ fear aligns with the prediction by finance analyst Jacob King that on-chain movements show 99% of beneficiaries of Mt.Gox repayments will sell.
Such an incident adds to the BTC market-wide dump by the German government that fuels the bearish momentum sweeping the crypto space since June.
Historically, Bitcoin and altcoins tend to show moves opposite to the majority’s expectation. As the crowd’s expectation gets stronger toward a further downtrend, the higher the probability of a contrary move emerges.
Possible Bitcoin Recovery
Despite the slight gains in BTC price, market data shows Bitcoin is 17% down in the past 30 days.
Crypto trader and influencer RookieXBT hints at a bullish return when Germany exhausts three-quarters of seized coins. RookieXBT highlights that a distribution from the defunct FTX exchanges in fiat will prompt bankruptcy victims to acquire crypto.
bullishness to return when Germany about 3/4 finished selling their coins imo
mtgox is scary but it’s not like you can explicitly tell onchain what’s being sold the way you can with the Germany coins (i don’t think) – makes things less dramatic
ethereum ETF – we’ve sold the…
— RookieXBT 🧲 (@RookieXBT) July 8, 2024
Insight into the options market through Laevitas.ch shows optimism about price surge, which is evident in a -7% delta skew as put options become affordable relative to the call options. A contrary observation where the skew metric surges above 7% would signal imminent fear of corrections.
The analysis by Santiment shows BTC traders already convinced by the widespread pessimism could lose sight of sudden price regain. Per Laevitas.ch data, the present -2% skew within the Bitcoin options portrays a healthy sentiment notable as the BTC price hovers around its lowest levels in four months.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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