Bitcoin’s price has been on a downward trend for the past few weeks, and the decline accelerated on Friday with a more than 3% drop in the last 24 hours. This has brought the price of Bitcoin to around $63,700, marking a five-week low and a 9% decrease over the past month. Despite this negative sentiment prevailing in the market, some contrarian bulls may find comfort in the indicators tracked by analysis firm Santiment.
According to Santiment, crowd sentiment towards Bitcoin has been extremely negative for the past four weeks. The firm noted that traders seem to be fearful or disinterested in Bitcoin, leading to a rare level of Fear, Uncertainty, and Doubt (FUD) in the market. However, Santiment believes that this prolonged period of negative sentiment could indicate a potential bounce-back in the future, especially with whale accumulation and trader fatigue in play.
Santiment’s Weighted Sentiment Index, which measures Bitcoin mentions on social media platforms and compares the ratio of positive to negative comments, has been in negative territory since May 23. This suggests that the overall sentiment towards Bitcoin has been predominantly negative in recent weeks.
In addition to social sentiment, data from Google Trends also indicates a decline in retail search interest for Bitcoin. Searches for “bitcoin” have been steadily decreasing since March 2024, reflecting a waning interest in the cryptocurrency among the general public.
The recent price drop in Bitcoin can be attributed to several factors, including $1 billion in sales from large holders, a strengthening US dollar, and a robust US technology index market that may be diverting investor funds away from cryptocurrencies. Moreover, outflow activity from US-listed spot Bitcoin exchange-traded funds (ETFs) has reached its highest level since late April, with $900 million leaving these products in the current week.
Despite the short-term challenges facing Bitcoin, some traders predict that the cryptocurrency could drop to the $60,000 level in the near future due to the lack of significant growth catalysts. However, the long-term outlook for Bitcoin remains positive, with many analysts maintaining a bullish stance on the digital asset.
Overall, while the current market sentiment for Bitcoin may be negative, there are indications that a turnaround could be on the horizon. Investors and traders are advised to monitor key indicators and market developments closely to make informed decisions in the volatile cryptocurrency market.