Bitcoin’s new 2020 high over the weekend has rejuvenated social sentiment which has done a complete u-turn according to recent research.
There are many technical and fundamental indicators that can give signs as to what market sentiment is like, and for the crypto industry, social media plays a big part.
According to analytics from Santiment ‘crypto twitter’ has done one of its biggest 180s in its decade long history, pivoting from negative to euphoric.
1) After #Bitcoin surged from $10.5k to $13.1k over the past three weeks, the social sentiment of #crypto #Twitter has done one of the biggest 180 turns in its decade-long history. The ratio of positive vs. negative commentary (combined with total volume of social posts) was at pic.twitter.com/fJi0Abldf1
— Santiment (@santimentfeed) October 26, 2020
It added that all-time negative levels were on October 3rd, which was reflected by the uptick of BTC shorts.
“But after surging to its current price levels, Santimentfeed data indicates that the mood has now shifted to borderline euphoric levels.”
Despair to Jubilation
The chart, which measures Bitcoin weighted social sentiment, was deeply in negative territory for most of October, even more so than the small dip that followed the Covid-crash in mid-March.
However, the ratio of positive vs. negative commentary, combined with the total volume of social posts, has surged back into the positive zone as the month draws to a close.
Santiment got it spot on in late September when it analyzed the same metric stating;
“Prices of BTC and other crypto assets tend to bounce most precipitously when the crowd is demonstrating a high level of FUD. This is exactly what we’ve been seeing for Bitcoin, Ethereum, and many altcoins following the early September retrace,”
That bounce occurred on October 21 when Bitcoin broke $12k for the first time in almost 2 months and surged all the way up to a new 2020 high of $13,350 five days later.
Bitcoin Fear and Greed
Other sentiment indicators such as the Bitcoin fear and greed index have also flipped bullish. It is currently deep in the green flashing a 75 which indicates ‘greed’. For the first half of the month, it hovered below 50 in the fear zone but is currently at a six-week high.
Analyst Josh Rager commented on the huge weekly candle closer adding that there have been multiple daily closes above those in July 2019.
Bitcoin with a 13%+ candle to close out the week
And ever since flipping the 2019 high daily close of $12,920…
Bitcoin has closed above it multiple days straight as we work on the highest daily close since Jan 2018
Pullbacks to be expected but exciting times ahead pic.twitter.com/XrQ6UqH5Ng
— Josh Rager 📈 (@Josh_Rager) October 26, 2020
Fellow analyst and chart guru, PlanB, was equally bullish;
“If you were not here during 2013 or 2017 bull markets: current bitcoin price rise is just a small taste of what’s next (weekly RSI in 70-90 range). We haven’t even started!”
At the time of press, Bitcoin was holding on to weekend gains, trading at $13,100.
Martin has been writing on cyber security and infotech for two decades. He has previous forex trading experience and has been covering the blockchain and crypto industry since 2017.
