Bitcoin Holders Expect Retrace, Will BTC Move Against Crowd Once Again?

Keshav Verma

1 year ago

3 mins read

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Data shows bearish sentiment has spiked among Bitcoin holders, something that could actually work in the favor of the asset’s price.

Social Media Users Have Turned Bearish On Bitcoin

As explained by the analytics firm Santiment, traders have come into the new week expecting the price of the cryptocurrency to retrace towards the $27,000 to $29,000 range.

The relevant indicator here is the “social volume,” which measures the total number of social media text documents that are making mentions of a specific term or topic.

The text documents here refer to posts/threads sourced from various popular social media platforms like Reddit, Telegram, and Twitter.

Something to keep in mind is that the metric only measures the unique number of such documents, meaning that regardless of whether a post mentions the term one time or five times, the contribution towards the social volume will still remain one unit.

This indicator helps us gauge the amount of discussion that a topic is receiving across social media right now. It can also be used to measure the market sentiment if some specific terms are applied.

To separate the Bitcoin discussions related to positive and negative sentiments, Santiment has taken the total social volume related to the cryptocurrency market and has then filtered it using terms like buy, bottom, and bullish for the former, and sell, top, and bearish for the latter.

Here is a chart that shows the trend in the social volume of these terms over the past week or so:

The value of the red sentiment seems to have been quite high in recent days | Source: Santiment on Twitter

As displayed in the above graph, the social volume related to negative sentiment has spiked recently. The positive sentiment, on the other hand, has remained at low values.

This would suggest that the majority of the Bitcoin traders on social media are bearish on the asset and are expecting it to register a drawdown in the near future.

Historically, BTC has tended to show price moves in the direction that the average investor isn’t expecting. The more heavily the crowd leans toward any particular side, the more the probability of such a reverse price move taking place becomes.

From the chart, it’s visible that the bearish sentiment has seen multiple spikes during the last week as the latest rally in the cryptocurrency’s price above the $30,000 mark has occurred.

Interestingly, one of these surges in the metric happened right before this rally started. The local top so far, however, also coincided with such a spike, but it’s also true that the positive sentiment was also elevated during it.

As the bullish calls are silent right now while the investors are engaging in bearish talks, it’s possible that Bitcoin could show a rise soon and go against what the majority sentiment has been.

BTC Price

At the time of writing, Bitcoin is trading around $30,700, up 15% in the last week.

BTC has been mostly moving sideways recently | Source: BTCUSD on TradingView

Featured image from iStock.com, charts from TradingView.com, Santiment.net

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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