Crypto Crowd Turns Bearish on Bitcoin as Halving Approaches: Santiment Data
The crypto crowd is starting to turn bearish on bitcoin (BTC), but could this be a sign that the current sell-off is about to come to an end? According to blockchain analytics platform Santiment, the masses are often wrong when it comes to predicting price movements in the market.
Santiment’s Social Trends indicator has been tracking the sentiment on crypto social media platforms like Telegram, Reddit, and 4Chan. The data shows a decline in mentions of “bull market” or “bull cycle” since late March, while mentions of “bear market” or “bear cycle” have been steadily increasing.
“According to the crypto crowd, the #bullmarket has essentially come to an end after #Bitcoin’s -16% market value drop since the #AllTimeHigh of $73,600 hit back on March 14th. At the same time, #bearmarket mentions are increasing,” Santiment said.
The decrease in mentions of keywords like “buy the dip” also suggests that retail investors’ hopes for a quick recovery and continued bull run, known as “hopium,” are fading. This decline in “buy the dip” mentions has historically signaled the end of downtrends.
Factors such as the dwindling probability of Federal Reserve interest-rate cuts, heightened geopolitical tensions, and U.S. tax payment timing have weighed on bitcoin this month, leading to a 14% price slide. The leading cryptocurrency hit lows under $60,000 before recovering to trade near $61,200 at press time.
Bitcoin’s blockchain is set to undergo its fourth mining reward halving, cutting the per-block BTC emission by 50% to 3.125 BTC. While some analysts, including JPMorgan, have warned of a deeper price slide following the event, the overall consensus remains bullish over the long term.
As the crypto crowd leans bearish on bitcoin, could this be a contrarian indicator that the current sell-off is nearing its end? Only time will tell if the wisdom of going against the crowd will hold true once again in the volatile world of cryptocurrency.
