Santiment, a cryptocurrency analytics platform, states that a key metric is showing bearish mode for the most traded cryptocurrency, Bitcoin (BTC). As the social dominance level of Bitcoin, or the discussion rate of Bitcoin relative to altcoins, is currently at 13.15%.
Santiment Analysis
As per the analysis done by Santiment, the price of crypto generally starts to increase when the social dominance level reaches above 20%. The analytic platform further states that the long-term traders are currently waiting for the flagship crypto asset’s social dominance level to rise again before potentially re-entering in the market.
On October 14, 2022 Santiment posted the tweet that “Traders are chasing short-term pumps right now to salvage losses. Weak hands dropped out of crypto in 2022, and long-term traders are waiting for Bitcoin to begin receiving the spotlight again. When BTC social dominance is high, prices typically rise.”
However, on the same day, the crypto market analytics platform also shared the data that shows that a lot of traders shorted Bitcoin (BTC) and altcoins in anticipation of a price drop after the announcement of inflation figures that surpassed expectations.
In response to the inflation news, BTC fell sharply to a daily local low of around $18,300. Then the price drop noted the BTC market hit a 3-week-high short versus long ratio. Still, it did not take long for the price to start rising, leading to the economic condition of short traders betting against the benchmark crypto.
On the other hand, data from Coinglass, Crypto Derivatives Market Monitoring Tool affirms the observation that on the day, more than 136,000 investors lost more than $300 Million in Futures contracts liquidations.
The current Bitcoin trading price is $19,138.57 USD with a 24-hour trading volume of $14.93 Billion USD. The most-traded cryptocurrency is down 0.08% in the last 24 hours as per the CoinMarketCap, with a live market cap of $367.16 Billion USD.
Moreover, Santiment also says that it has noticed that throughout this month so far, digital asset prices have moved reverse to persisting market sentiment. The analytic platform reported that excessive bearish sentiment has resulted in crypto prices going up while excessive bullish sentiment has led to crypto prices falling.
On the October 13, 2022 Tweet by Santiment, it added as “Though the long-term crowd sentiment has remained negative, swing trades in October have been dictated by how often bullish and bearish calls are happening. When social platforms show too much bearish sentiment, prices bounce. When bullish, prices drop.”
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2022/10/16/santiment-suggests-a-key-metric-seems-bearish-for-bitcoin/