When the Crowd Calls the Bottom, Be Wary
The crypto market is a tricky place. When everyone starts saying the bottom is in, it might be time to think twice. This is what Santiment, a crypto sentiment platform, recently pointed out. They said that true market lows often happen when most people are still expecting prices to drop further.
Bitcoin's Recent Dip
Recently, Bitcoin (BTC) dipped below $95,000, and many traders thought the worst was over. But history shows that when a lot of people think the market has bottomed, it might not be the case. This is especially true when big psychological price levels, like Bitcoin falling below $100,000, are breached.
Bullish Predictions
Despite this, some big names in the crypto world, like Arthur Hayes and Tom Lee, still believe Bitcoin could hit $200,000 or more by the end of the year. But sentiment is not looking great. The ratio of positive to negative comments about Bitcoin is at its lowest in over a month.
Social Dominance and Sentiment
Santiment also noted that Bitcoin's social dominance has soared to over 40%, meaning it's the main topic of a very fearful conversation. Many traders blamed the recent Bitcoin price drop on Michael Saylor, the chairman of Strategy, selling off Bitcoin. Social media mentions of “Saylor” spiked as Bitcoin fell.
ETF Outflows: A Sign of Panic?
Interestingly, the significant outflows from spot Bitcoin ETFs might actually be a good sign. Santiment explained that large ETF inflows often mark local price tops, while significant outflows can coincide with market bottoms, suggesting retail panic. Over the past three trading days, US-based spot Bitcoin ETFs saw $1.17 billion in outflows. On Thursday, spot Bitcoin ETFs saw $866 million in net outflows, marking their second-worst day on record after the $1.14 billion daily outflows on Feb. 25.
