We are at a delicate moment since BTC’s last drop on the 5th. It is clearly holding at the psychological support of 40k and despite the severity of the situation, the panic spikes in sentiment have been one-off and have been recorded when BTC has made three dips to 40.7k from which it has quickly recovered.
What’s more, in the last few hours it’s recovering positions is around 44k.
Some charts show how small investors seem to have withdrawn from the market giving more prominence to large traders who continue with their stockpiling of assets. If the exchanges dry up, when there is upward price pressure, the lack of BTC could drive the price up very fast.
A good sign of this is the bullish news that should have lifted the market’s spirits that PayPal is going to release its own crypto and yet has not caused it to react. In times of more euphoria, news like this would have undoubtedly triggered greater effects as it is a proof of the institutional adoption of Blockchain technology. And these are news that small investors would have bought and reacted to.
Scope of PayPal news
However, as we see in the graph above, in the last 90 days, conversations in social media in the crypto world about Paypal and their creation of stablecoin, while growing, has not had a significant impact. Social volume has increased, but not skyrocketed. And there has been no impact on the price of BTC.
Another thing is the medium-term effect on the positive sentiment of small investors. If they see a couple of positive news, that may create the FOMO (fear of being left out) again.
For example, advertisers have proven that you have to re-impact customers with offers to get them to buy. Rarely there is a single impact to convince someone to buy something.
The same thing happens with politicians. We trust them with our vote, we can forgive them a mistake or two, but at a certain point, after a few mistakes, we decide not to vote for them anymore. Crypto market is very similar. We have to wait for a few good news of DEFI adoption to see some green charts. Then we need to see new wallets being created and then we can be sure that we are back on track.
Weekly market sentiment
As every week, if we analyze the sentiment for BTC and for the rest of the market, we see that despite the delicate situation in which it finds itself, the level of euphoria remains stable with a level of 65% for BTC and 82% for the rest of the market. It doesn’t affect anything that in the last 24h it has risen to 78% euphoria for BTC after the last rally.
Market sentiment for BTC last 24h
In fact, what we see on the charts are three small price bumps that have not created panic into the social networks either, leading us to believe that an upward move may be supported by investors who believe we have hit the ground.
Weekly market sentiment
We will see over the next few days if we are at an inflection point and we will find the bullish path or it is just a small respite for a bearish trend.
Cheers Crypto!!!