A top crypto analytics firm says trader optimism has waned as the price of Bitcoin (BTC) continues to tumble this week, which some investors are interpreting as a positive sign toward market capitulation.
In a new blog post, Santiment notes the number of “buy the dip” mentions across crypto social media channels has diminished to a low level.
“Often the crowd unanimously call the dip/bottom earlier than the actual dip and the real bottoms forms when the crowd least expects [it], which is represented by low to no mentions in Buy The Dip. As of now the mentions are very low.”
Santiment also notes that traders are starting to favor shorting rather than longing on exchanges.
“This bearish funding rate can cause liquidations that shoot up prices in a hurry.”
Other crypto analysts are less optimistic. Pseudonymous trader Kaleo tells his 473,100 Twitter followers that Bitcoin is looking weak, and it is “only a matter of time” before the top crypto asset’s sell-off accelerates.
“BTC found support at the base of the Feb 3rd lows where we saw the bullish leg up. Macrostructure still looks weak, and I wouldn’t find any confidence in this bounce until a break above $40K. Still expecting this to slowly bleed out until a breakdown to ~$32K.”
Bitcoin is trading at $37,603.67 at time of writing, up more than 3% in the past 24 hours.
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