Analysts Highlight Investor Sentiment Shift As Bitcoin Approaches $98,000

Samuel Edyme

6 months ago

3 mins read

Analysts Highlight Investor Sentiment Shift as Bitcoin Approaches $98,000

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After weeks of consistent price correction, Bitcoin latest performance now appears to be demonstrating a rebound as the asset has earlier today reclaimed the $96,000 price mark now approaching the $98,000 level.

As Bitcoin approaches this key level, data shows that the top crypto has shown mixed signals across key market indicators, reflecting a subtle yet significant shift in investor sentiment.

Particularly, analysts have identified specific patterns in funding rates and premium metrics, which serve as vital tools for interpreting market sentiment and predicting potential price movements.

Bitcoin Current Funding Rates And What It Signals

A notable observation by CryptoQuant analyst Mignolet highlights how funding rate movements reflect retail investor sentiment. According to Mignolet analysis, funding rates, which represent the cost of holding long or short positions in perpetual futures contracts, are exhibiting nuanced movements.

Historically, during moments of strong resistance, funding rates tend to decline, signaling subdued sentiment and caution among investors.

In late October 2024, when Bitcoin was approaching its all-time high, funding rates showed similar behavior, reflecting investor hesitation despite rising prices. However, the current scenario presents a contrasting sentiment.

The analyst disclosed that while corrective price movements have emerged, investors are viewing these pullbacks as buying opportunities rather than reasons for fear or contraction.

This subtle psychological difference could influence market dynamics significantly, potentially paving the way for sustained upward momentum. Mignolet wrote:

Similar corrective candles have appeared, and from a technical perspective, this position might seem even more precarious. However, the sentiment is different. People now view this as an opportunity and believe it’s a reasonable position to buy. I believe this subtle difference in sentiment has the potential to produce very significant results.

Coinbase Premium Indicator Reaches Historic Low

Another key observation comes from the Coinbase Premium Indicator, a metric that measures the price difference between Bitcoin on Coinbase (a US-based exchange) and other global exchanges.

Coinbase Premium Index Hits a 12-Month Low!

“This drop not only signals a lack of institutional demand but also underscores the cautious sentiment among U.S. investors.” – By @burak_kesmeci

Read more 👇https://t.co/nIRWlciLwo pic.twitter.com/LYfKmNM7t5

— CryptoQuant.com (@cryptoquant_com) January 2, 2025

Recently, this premium dropped to its lowest level since January 2023, a period that marked a significant market bottom. Historically, when this premium turned negative during bullish phases, it often preceded a price rebound.

Analysts suggest that such negative sentiment from US investors often triggers strong buying pressure, which can reverse short-term downward trends and fuel long-term price gains.

Bitcoin (BTC) price chart on TradingView — BTC price is moving upwards on the 2-hour chart. Source: BTC/USDT on TradingView

Featured image created with DALL-E, Chart from TradingView

Samuel Edyme

Meet Samuel Edyme, Nickname - HIM-buktu. A web3 content writer, journalist, and aspiring trader, Edyme is as versatile as they come. With a knack for words and a nose for trends, he has penned pieces for numerous industry player, including AMBCrypto, Blockchain.News, and Blockchain Reporter, among others.

Edyme’s foray into the crypto universe is nothing short of cinematic. His journey began not with a triumphant investment, but with a scam. Yes, a Ponzi scheme that used crypto as payment roped him in. Rather than retreating, he emerged wiser and more determined, channeling his experience into over three years of insightful market analysis.

Before becoming the voice of reason in the crypto space, Edyme was the quintessential crypto degen. He aped into anything that promised a quick buck, anything ape-able, learning the ropes the hard way. These hands-on experience through major market events—like the Terra Luna crash, the wave of bankruptcies in crypto firms, the notorious FTX collapse, and even CZ’s arrest—has honed his keen sense of market dynamics.

When he isn’t crafting engaging crypto content, you’ll find Edyme backtesting charts, studying both forex and synthetic indices. His dedication to mastering the art of trading is as relentless as his pursuit of the next big story. Away from his screens, he can be found in the gym, airpods in, working out and listening to his favorite artist, NF. Or maybe he’s catching some Z’s or scrolling through Elon Musk’s very own X platform—(oops, another screen activity, my bad…)

Well, being an introvert, Edyme thrives in the digital realm, preferring online interaction over offline encounters—(don’t judge, that’s just how he is built). His determination is quite unwavering to be honest, and he embodies the philosophy of continuous improvement, or “kaizen,” striving to be 1% better every day. His mantras, “God knows best” and “Everything is still on track,” reflect his resilient outlook and how he lives his life.

In a nutshell, Samuel Edyme was born efficient, driven by ambition, and perhaps a touch fierce. He’s neither artistic nor unrealistic, and certainly not chauvinistic. Think of him as Bruce Willis in a train wreck—unflappable. Edyme is like trading in your car for a jet—bold. He’s the guy who’d ask his boss for a pay cut just to prove a point—(uhhh…). He is like watching your kid take his first steps. Imagine Bill Gates struggling with rent—okay, maybe that’s a stretch, but you get the idea, yeah. Unbelievable? Yes. Inconceivable? Perhaps.

Edyme sees himself as a fairly reasonable guy, albeit a bit stubborn. Normal to you is not to him. He is not the one to take the easy road, and why would he? That’s just not the way he roll. He has these favorite lyrics from NF’s “Clouds” that resonate deeply with him: “What you think's probably unfeasible, I've done already a hundredfold.”

PS—Edyme is HIM. HIM-buktu. Him-mulation. Him-Kardashian. Himon and Pumba. He even had his DNA tested, and guess what? He’s 100% Him-alayan. Screw it, he ate the opp.

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