New data shows that investors have become more negative after bitcoin fell to a $ 3,000 level in recent weeks. In the past, such developments have shown a price floor, and then we saw the beginning of a new upward trend.
to the the report Bitcoin crypto-potito tried to break the $ 37,000 resistance at the end of June, but to no avail, and the market continued to decline for several days after that. Despite a promising start and a return in early July, Bitcoin has now lost more than $ 5,000 in value since last month and has hit a three-week low.
Naturally, these developments have affected the sentiments and general attitudes of bitcoin market investors. Data from the analytics website Santiment shows that Twitter users’ general feelings about bitcoin remain negative, as users of the social network predict a deeper price drop.
As can be seen in the chart above, the price of bitcoin often tends to move in the opposite direction of market sentiment. For example, the feelings of Twitter users in early January (December), when the price reached a new historical high, were very positive, but the market trend reversed rapidly. However, as user sentiment re-emerged, Bitcoin began a new uptrend, reaching a record high of $ 65,000.
Similarly, the sentiment of Twitter users during the recent downturn in the market showed that more price growth is needed to once again draw the attention of traders to Bitcoin.
As this data reflects the emotions of Twitter users, the Fear and Greed Index provides a broader picture of market sentiment. In addition to monitoring users’ conversations on social media, the Fear and Greed Index examines other forms of data, including price fluctuations, surveys, and trading volume, to determine whether overall market sentiment about Bitcoin is positive or negative.
This index presents the final results in the form of numbers between zero (maximum fear) and one hundred (maximum greed). The Fear and Greed Index also confirms that market sentiment is negative, as it is currently showing maximum fear, a situation that has dominated the market for several weeks. This index has decreased since last week and has reached the level of 20 to 15.
The fear and greed index has also been affected by recent price fluctuations, however, it is clear from the historical trend that bitcoin reacts well when the index is at its lowest level or maximum fear.
Also read: What is the Fear and Greed Index and what is its use in price analysis?