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Bitcoin (BTC) prices generally move in the opposite direction of what traders expect, according to a study by cryptocurrency sentiment analysis firm Santiment.
Santimento posted on Twitter earlier this week that he has seen the price of Bitcoin move against the expectations of the “crowd” many times, most recently last weekend.
Bitcoin briefly rallied close to $27,300 last Sunday as traders expressed their “distrust” on social media, Santimento wrote.
Today, however, the situation has changed and optimism is returning to the market.
This seems to “end up leading to the top,” Santimento said in a tweet.
At the time of writing, Bitcoin was down about 2.2% over the past 24 hours, trading near the $26,700 level, according to CoinGecko data.
After a week of unusually stable Bitcoin prices, the price as a whole has remained largely unchanged over the past seven days.
Sentiment analysis, like Santiment, is a relatively popular technique used among cryptocurrency traders, and when sentiment looks extreme on either the bullish or bearish side, it can be used to “counteract the crowd.” It is common wisdom to trade with “te”.
A commonly used tool in addition to Santiment is the Bitcoin Fear & Greed Index, which considers inputs from various sources such as social media, Google search, price momentum, and volatility.
At the time of this writing, Bitcoin’s fear and greed index is just 50, indicating neutral sentiment among market participants.