Bitcoin’s price experienced a significant rebound over the past 30 hours, surging back to $57,000 after a brief dip.
Santiment, a leading market intelligence platform reported that the rally follows a wave of bearish sentiment on social media, where many speculated that Bitcoin could fall to as low as $40,000.
The swift recovery is a testament to the growing influence of crowd sentiment in the cryptocurrency market, a trend that has been increasingly evident throughout 2024.
Growing Influence of Social Media on the Crypto Market
Leading market intelligence platform Santiment has drawn attention to the influence of social media sentiment on market trends. According to the platform’s most recent analysis, the proportion of positive to negative comments on social media frequently indicates future market peaks and troughs.
For example, the cryptocurrency market peaked due to a sudden rise in positive discourse surrounding Ethereum after the mid-July ETF frenzy. Similarly, sentiments on social media have been closely linked to recent highs and lows in Bitcoin prices.
After peaking at $57,000, the price of Bitcoin is currently hovering around $56,000. The current price of Ethereum is about $2,500. Other altcoins have also experienced gains; in a single day, Toncoin increased by over 3% and SOL by around 7%.
With 1.25% growth, the value of the global cryptocurrency market has surpassed $2 trillion. That being said, the total trade volume has decreased by 42.42% to $103.62 billion. Even though prices are trending upward, this decline in trading volume can point to a cautious market.
Experts’ Advice to Remain Cautious
Even with these encouraging developments, the market as a whole is still nervous. Uncertainty has been brought about by the upcoming 2024 US presidential election, notably about the regulatory environment for cryptocurrencies in the future.
According to a recent Bloomberg poll, Republican nominee and pro-crypto enthusiast Donald Trump is facing a tough fight with Democratic nominee Kamala Harris. The already complex and unstable cryptocurrency industry has become much more so due to political unpredictability.
Experts are advising caution amidst the optimism. Antoni Trenchev, co-founder of Nexo, emphasized the importance of monitoring key technical levels. He told CNBC that while Bitcoin’s bounce above $50,000 is encouraging, the real signal of a bullish market would be if Bitcoin retakes its 200-day moving average, currently around $61,500. Trenchev pointed out that 30% slumps are common in bull markets, but the current environment remains choppy and volatile.
Where is the Market Headed?
Santiment’s analysis also warned of the dangers of extreme sentiment. Positive sentiment spikes frequently follow market tops, according to the platform, as Ethereum demonstrated in July. On the other hand, times of great fear and uncertainty may indicate market bottoms, offering chances for investors who take a contrarian approach.
Traders and investors are encouraged to remain aware and careful as the market reacts to these sentiment-driven signals. In the coming months, social media sentiment and market movements will probably continue to interact in a significant way, particularly as external factors like changes in U.S. regulations and the state of the world economy continue to impact the market.