A leading crypto analytics firm says the crypto markets bounced back this week just after trader sentiment plummeted.
In a new blog post, Santiment notes that the social sentiment of Bitcoin (BTC) this week crashed to its lowest point since October 2020.
The firm says its weighted sentiment tracker analyzes the positive and negative commentary surrounding a crypto asset.
BTC’s price surge happened “immediately” after crossing that low point in terms of sentiment, according to Santiment.
Trader money was also following suit, the firm says.
“Exchange contract perpetual funding rates had been skewing negative for much of the past 10 days even prior to the war becoming official. This indicated that traders were shorting the markets more than longing.
Those who were betting for Bitcoin’s price to drop were caught off guard, and many were liquidated Monday.”
Santiment predicts crypto volatility will continue as the market reckons with ongoing news of Russia’s invasion of Ukraine.
The firm also warns that Bitcoin’s current correlation with the S&P 500 is a “concern.”
“Any breakout away from this kind of correlation, which today was a very good early sign, is excellent as a signal for a continued breakout for BTC and the rest of crypto.”
Bitcoin is trading at $44,070.14 at time of writing.
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