BTC’s price movements over the past week have been nothing short of a rollercoaster ride, and the volatile ride is expected to continue in the coming days, especially with Trump’s inauguration just around the corner.
Since Bitcoin lost a substantial portion of its weekly gains, it is expected that the crowd has turned bearish. However, that could be a blessing in disguise.
The bears are back
Following MicroStrategy’s Monday announcement of its latest BTC purchase, the largest cryptocurrency by market capitalization soared above $100,000 and above $102,000 for the first time this year. However, that surge of relief was short-lived and the asset plummeted sharply in the following days, falling by more than ten thousand dollars at one point in less than 48 hours.
The culmination came on Thursday when bitcoin fell to $91,250 (on Bitstamp), which became its lowest price level since late November 2024. The bulls finally intercepted the nosedive at this point and did not allow a further decline. below $90,000 despite multiple warnings from prominent analysts.
Naturally, the crowd turned bearish after such a massive drop, and the Fear and Greed Index returned to neutral on Friday for the first time since October. These metric fluctuations usually show a large movement in either direction and suggest an upcoming movement in the opposite.
Is that good news?
Cryptoanalysis resource Santiment has frequently suggested that BTC tends to move in the opposite direction to crowd expectations. This means that in times of uncertainty similar to today, when retail trading turns bearish on social media, the cryptocurrency proves them wrong with a notable price increase and vice versa.
Such was the case in early December 2024, when bitcoin fell again from over $100,000 to $90,000. However, in the following weeks, the asset reversed its trajectory and even recorded a new all-time high of over $108,000 on December 17.
Consequently, Santiment suggested that the latest developments could be another hidden bullish signal, especially if the crowd remains so bearish.
Cryptocurrencies have been a slight disappointment for traders over the past week and we have seen higher than usual mentions of selling interest. Just as we saw during the Q4 bull rally, when the crowd starts to become too bearish, prices are much more likely to rise. pic.twitter.com/0U9qZky2ko
– Sentiment (@santimentfeed) January 11, 2025
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