The ripples of tension across cryptocurrency communities are palpable. Bitcoin, the widely acknowledged front-runner of the crypto economy, has experienced a drastic slide below the $66,000 threshold, yet the hit has triggered a wave of investors echoing the mantra of ‘buy the dip’ across social media channels.
Santiment, a cutting-edge analytics firm, recently released some fascinating data, suggesting that following Bitcoin’s sharp decline, the market sentiment leaned more towards bullish than bearish assertions. This isn’t surprising, considering that Bitcoin is often viewed as a countercyclical asset that elicits a lot of attention, especially in uncertain financial times.
This flurry of activity is measured through a metric called “Social Volume”, a tool that gauges the volume of discourse surrounding a particular subject or term across a broad range of social media platforms in real-time. The data presented is not a raw tally of mentions, but rather a measure of how many online posts feature at least one mention of the term in question. This method proves valuable. Mere numbers alone can’t provide an accurate picture of the overall conversation since a spike could be due to intensive discussions on a few threads.
In the center of the storm is Santiment, sweeping social media with a fine-tooth comb, filtering the enormous volume of content for bullish and bearish keywords. The aim is to pit the two sentiments against each other and observe where the pendulum swings.
A quick glance at the graph depicting the trend in Social Volume for these terms since the start of 2024 is enlightening. It reveals an enormous surge in bullish terms such as ‘buy’ or ‘bullish’, immediately following the recent Bitcoin price plunge, a sure-fire indication that many investors see the slump as an opportunity to bag more of the virtual asset.
Interestingly, bearish Social Volume has also stirred somewhat, but to a lesser extent, being dwarfed by the bullish terms’ peak by half. At first blush, the bullish investor’s enthusiasm seems promising. Yet the reality identifies it as a possible roadblock to any rebounds.
Santiment explains that historically, the optimum ‘buy the dip’ chances arise when there’s a touch of fear in the crowd consensus concerning further drops. In contrast, the current market enthusiasm may be frustrating the chances of a market bottom emerging.
As it stands, Bitcoin is hovering precariously around the $65,700 mark, signifying a drop of over 7% in the past week. But then again, Bitcoin’s dipped before and risen stronger, and this volatility isn’t something new to its stakeholders. Experienced investors know the drill – when Bitcoin takes a dive, the most seasoned players don’t just hold their breath, they dive right in.