Blockchain analytics platform Santiment believes that the current bearish sentiment surrounding Bitcoin may soon be overturned. The platform’s analysis is based on data gathered from social media platforms such as Telegram, Reddit, X, and 4Chan, tracking keywords and topics that generate interest within the crypto community. According to Santiment’s Social Trends indicator, the market could potentially bottom out right before or shortly after the highly anticipated halving event expected to occur within the next two days. They have highlighted the historical tendency of prices to move in the opposite direction of mass traders’ expectations.
Santiment’s data reveals a decline in mentions of the “bull market” or “bull cycle” since late March, while references to the “bear market” or “bear cycle” have steadily increased. The platform notes that the crypto crowd perceives the end of the bull market following Bitcoin’s 16% drop from its all-time high of $73,600 on March 14. Furthermore, there has been a decrease in mentions of “buy the dip,” signifying waning optimism among retail investors. Historically, a decline in “buy the dip” mentions has often indicated the end of bearish trends.
Bitcoin has faced several challenges this month, contributing to a 14% price decline. Factors such as reduced expectations for Federal Reserve interest-rate cuts, geopolitical tensions, and the timing of U.S. tax payments have weighed on the leading cryptocurrency. Despite these challenges, Bitcoin dipped below $60,000 before recovering to trade near $61,200 at the time of writing. The long-term outlook remains optimistic as Bitcoin’s blockchain prepares for its fourth mining reward halving, where the emission of BTC per block will be reduced by 50% to 3.125 BTC.
Bitwise recently stated that while the month following the halving typically sees a modest drop in price, the subsequent year often witnesses exponential gains. Following the 2012 halving, Bitcoin experienced a meager 9% increase in the month post-halving, only to skyrocket by a staggering 8,839% over the following year. Similar patterns were observed after the 2016 and 2020 halvings, with Bitcoin’s price surging significantly in the year following each event. Crypto.com CEO Kris Marszalek has also emphasized the long-term bullish outlook for Bitcoin despite the possibility of selling pressure in the lead-up to the halving event due to the “buy-the-rumor, sell-the-news” trading phenomenon.
In conclusion, Santiment’s analysis suggests that the current bearish sentiment surrounding Bitcoin may soon be overturned, with the potential for the market to bottom out right before or shortly after the upcoming halving event. Despite challenges faced by Bitcoin this month, the long-term outlook remains optimistic as historical patterns indicate potential exponential gains following previous halving events. As the crypto community awaits the fourth mining reward halving, analysts and industry experts remain bullish about Bitcoin’s future performance, emphasizing the positive impact the event is expected to have on the market in the long run.
