Sentiment for bitcoin on social media is at its lowest point for 2024, and fear is beginning to creep into the crypto market. Is this a sign that bitcoin could be getting ready to make a big move?
Social activity and positive sentiment diminishing
Bitcoin is currently battling to stay above the support at $61,000. With positive sentiment at a low ebb across social media and also pervading most of the crypto market, could the alpha cryptocurrency be preparing for a catastrophic drop?
⚠️#Bitcoin social activity is at the lowest point in all of 2024.https://t.co/m4l02hlLIa pic.twitter.com/rCIqCWAzfI
— LunarCrush (@LunarCrush) May 8, 2024
As can be seen by the data supplied by LunarCrush, apart from a big spike in bitcoin social activity when the Spot Bitcoin ETFs were launched, and a couple of spikes since then, bitcoin-related activity across social media platforms has diminished significantly over the first half of this year.
Even in the crypto market itself, investor sentiment has begun to turn more towards fear as bitcoin has continued to make lower highs and lower lows since it made its new all-time high back in mid-March.
Is a big dip coming?
Does this mean that this is going to continue, and that the bitcoin bull market could have already made its top? Nothing can be discounted when it comes to markets, but looking at past cycles, for this one to finish so quickly would not be likely.
Could the price drop further?
Yes, of course. A dip as far down as $51,000 would still allow $BTC to stay above its bull trend, and could even be an extremely healthy move that could have the potential of prolonging this bull market, enabling the $BTC price to reach a higher level.
$BTC still in a bull market
Source: Coingecko/TradingView
Looking at the daily time frame for $BTC, it should be noted that the price is battling with the support at $61,000 yet again. The more that a support line is tested, the more likely it is that it will be broken. However, a downwards trend line has developed since 8 April, which also adds support at this level.
With all this said, if bitcoin is still in its bull market, and given that no critical levels have been broken, a bounce could soon be forthcoming. History tells us that it’s at the point of worst sentiment that the market will generally reverse course.
Environment for bitcoin should improve towards end of year
Looking out into the rest of this year, there are factors that could provide a potential huge boost to risk assets such as bitcoin, and this is primarily a worsening of economic conditions which would likely force the Federal Reserve into rate cuts, and also, the presidential election in November could also be foreshadowed by more money printing in order to put a bit of gloss on the current administration.
All this extra liquidity in the system would benefit bitcoin, and help the alpha cryptocurrency in its push to higher levels, keeping it buoyant for the rest of its bull cycle, which would potentially come to a climax at some point in 2025.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
