Data shows the social media sentiment around Bitcoin has remained deeply bearish despite the recovery that the cryptocurrency’s price has made.
Social Media Data Suggests Retail Still Fearful About Bitcoin
In a new post on X, analytics firm Santiment has discussed about how the Positive/Negative Sentiment for Bitcoin has developed on social media following the recent recovery surge in the asset’s price.
The Positive/Negative Sentiment refers to an indicator that tells us, as its name suggests, how the positive and negative sentiments related to a given asset compare on the major social media platforms.
The metric works by putting social media posts/threads/messages containing mentions of the asset through a machine-learning model to differentiate between positive and negative comments. Then, it counts up the number of posts in each category and finds their ratio.
When the value of the indicator is greater than 1, it means the asset is observing more bullish messages than bearish ones. On the other hand, the metric being under this threshold implies the dominance of a negative sentiment.
Now, here is the chart shared by Santiment that shows the trend in the Positive/Negative Sentiment for Bitcoin over the last few months:
As is visible in the above graph, the Bitcoin Positive/Negative Sentiment rose to a notable level when the asset saw its rally in January. This suggests that retail traders on social media became greedy.
What eventually followed the market greed was a top in the cryptocurrency and a reversal to the downside. As this drawdown took BTC back to the $60,000 level, the Positive/Negative Sentiment plummeted, meaning that fear now dominated social media platforms.
Just like how the greedy sentiment led into a top, this bearish mentality paved way for a rebound instead. This is a pattern that has been witnessed with digital asset markets time and time again, with prices tending to move against the expectations of the crowd.
Interestingly, even though BTC has climbed back into the high $60,000 levels since its low, the Positive/Negative Sentiment has continued to be at low levels. “Historically, while FUD is high, price rebounds have a heightened probability,” noted the analytics firm. It now remains to be seen how Bitcoin will develop in the near future, given the current bearish sentiment.
In some other news, the stablecoin market cap has dipped recently, as Capriole Investments founder Charles Edwards has highlighted in an X post.
Edwards has pointed out that the stablecoin market cap has historically only fallen in bear markets. If the recent trajectory of the combined USDT and USDC market cap is to go by, capital may once again be leaving this side of the sector.
BTC Price
Bitcoin recovered above $70,000 earlier, but the coin has since retraced a bit as its price is now trading around $67,700.
