Crypto Crowd Sentiment Surges as Bitcoin Bulls Bet the Bottom | Crypto Retro
Crypto Crowd Sentiment Surges as Bitcoin Bulls Bet the Bottom is In.
Prior to the recent DoJ FUD (fear, uncertainty and doubt) and US equity market weakness-induced pullback in Bitcoin and broader cryptocurrency markets on Wednesday, the crypto trading crowd was having its second most bullish week in terms of sentiment in the past 14 months, crypto analytics firm Santiment revealed in a chart shared on Twitter on Thursday.
As of the 17th of January, Santiment’s Bitcoin Weight Social Sentiment (BWSS) index, which is released on a weekly basis, had jumped to 1.219. The jump coincides with Bitcoin’s recent rally back to the north of the $21,000 level for the first time since prior to the abrupt collapse of Sam Bankman-Fried’s FTX/Alameda crypto trading empire.
Santiment’s BWSS index will probably drop a little next week if Bitcoin is unable to recover back to the north of the $21,000 level. BTC/USD was last changing hands in the $20,700s. Prices are currently being held down by some much overdue profit-taking, with the 14-day Relative Strength Index (RSI) having recently rocketed to its most overbought level since early 2021.
In 2022, Bitcoin bulls got caught out by a number of bear market traps – this is where, after a prolonged decline, the market teases bulls with a small rally, suckers them back in, and then proceeds to drop once again. Bitcoin bulls where caught wrongfooted as US and global inflation surged more than expected, prompting major central banks like the Fed to tighten financial conditions far more aggressively than expected.
Not only did 2022’s aggressive rate hikes force investors out of speculative assets like crypto and slam the breaks on global economic growth, but the shift in macro conditions triggered a painful deleveraging cycle within speculative corners of the crypto industry, beginning with the collapse of unsustainable ecosystems like Terra and highly levered hedge funds like Three Arrows Capital before culminating in November’s collapse of FTX.
