Data Suggests Investors Fear Cryptocurrencies Are in a Bear Market, But There’s One Bright Spot
Social trend data On-chain analytics firm Santiment reveals that most traders believe that crypto has officially entered a bear market. A bear market refers to a prolonged price decline characterized by a steep decline from recent highs amid widespread pessimism and negative investor sentiment.
Our Social Trends data confirms that the trading crowd feels too much #crypto is in an officer #bear market, mid may was the last time #recession This sentiment was prevalent, which is a very promising sign that the weak hand is surrendering. https://t.co/Xyuw1L5fRB pic.twitter.com/Uz882URRla— sentiment (@santimentfeed) 10 January 2022
After a drop in the previous week, bitcoin fell to a low of $40,505 on January 8. According to data from CoinMarketCap, Bitcoin is currently down 10.58% over the past seven days.
Most of the altcoin tokens are also down over the past seven days, with many recording losses of between 10% and 30%. However, tokens such as Chainlink (LINK, +31.14%), Cosmos (ATOM, +6.11%) and Internet Computer (ICP, +34.97%) are rising on a weekly basis.
The cryptomarket tanked on January 5, along with equity market minutes following the December meeting of the US Federal Reserve, indicating that the central bank may raise interest rates as soon as this March. In addition, a nationwide internet shutdown forced local miners to shut down their equipment to quell unrest in Kazakhstan, the second largest country in bitcoin mining.
here’s a positive sign
Following the market drop, the Crypto Fear and Greed Index remained in the extreme fear zone, reaching 23 points out of 100.
According to Sentiment, the last time bearish sentiment prevailed was in mid-May 2021, when Bitcoin touched a low of $30,000 after falling from a high of $64,899.
The on-chain analytics firm noted that the bearish spread across the board could be a very promising sign that weak hands are surrendering. It notes that past ‘bear market’ spikes have led to short-term growth until the FUD (Fear, Uncertainty, Doubt) closes.
cryptoanalyst Lark Davis Jokingly hinted at impending buying pressure for bitcoin amid rising inflation. New figures will be released on January 12th (Wednesday), in which according to Crypto Lark, inflation is expected to hit a high of 7.1%. Rising inflation is beneficial to bitcoin, as it acts as an inflation hedge.
Bitcoin trades at $41,898 as of press time.