Crypto analytics platform Santiment says one key factor is elevating the odds of digital assets witnessing a recovery.
In a new thread on the social media platform X, the market intelligence firm says excessive bearish sentiment by investors raises the likelihood that digital assets spark a rally, similar to what was witnessed in Q4 of last year.
“Crypto has been a slight letdown for traders over the past week, and we have been seeing higher than usual mentions of selling interest. Just like we saw throughout the Q4 bull rally, when the crowd begins to get too bearish, higher prices become much more likely.”
Santiment’s chart shows that social media mentions of selling digital assets spiked on December 4th before the markets exploded. It also shows a spike of social media selling mentions on January 8th, potentially foreshadowing another marketwide rally.
Santiment goes on to note that the rising amount of crypto wallets related to top assets such as Bitcoin (BTC), Ethereum (ETH), XRP, Cardano (ADA) and Dogecoin (DOGE) is also a good sign.
“BTC: +102,000 Wallets.
ETH: +645,000 Wallets.
XRP: +58,000 Wallets.
ADA: +2,800 Wallets.
DOGE: +29,000 Wallets.
LINK: -3,300 Wallets.
If wallets are rising fast, the community is comfortable with the project for the long term. If wallets are dropping, there may be some excess FUD (fear, uncertainty and doubt) that indicates an opportunity to buy (as a contrarian to the panicking crowd).”
Don’t Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
Follow us on X, Facebook and Telegram
Featured Image: Shutterstock/Troyan
Read the full article here