Social media sentiment for Bitcoin has slumped to a two-year low, yet technical indicators are still saying “buy.” A number of metrics indicate that social and trading sentiment for Bitcoin is still low despite its price breaking above $11,000 a couple of hours ago.
On-chain analytics provider Santiment has revealed that weighted social sentiment for Bitcoin is at its lowest level for two years. The metric takes into account the overall volume of Bitcoin mentions on Twitter and compares the ratio of positive vs. negative commentary on the platform.
Social sentiment surged a few months ago when Bitcoin started its strong recovery following the pandemic-induced market crash in mid-March. However, for most of May, June and July, when the asset was consolidating in the low $9,000 range, it fell into negative territory again.
The analytics provider noted that, counterintuitively, negative sentiment at extremely low levels correlates with price rises, whereas extreme highs correlate with price retracements.
Bitcoin reached a 2020 high of $12,400 in mid-August, but has failed to top 2019’s peak of $13,800 leading a number of analysts to assert that the lower high on the longtime frame indicates that we are not in a bull market just yet.
Popular charting platform Tradingview also has its own sentiment indicators for the asset derived from a number of technical indicators. On the daily and weekly views, they are flashing buy signals, whereas things are more neutral on the shorter time frames.
Bitcoin has been largely correlated to stock market movements for much of this year; however, the “September effect” is a term that has come about because it is a historically weak month for stock market and cryptocurrency price returns (as Kraken pointed out in its most recent update). This could be reflected in social sentiment as reported by Santiment.
At the time of writing, Bitcoin was still trading just above $11,000, a gain of 2.8% on the day and almost 8% on the week.
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