The price actions for BTC in the past week or so were nothing short of a full-on rollercoaster, and the volatile ride is expected to continue in the following days, especially with Trump’s inauguration just around the corner.
With bitcoin losing a substantial chunk of its weekly gains, the crowd has expectedly turned bearish. However, that could be a blessing in disguise.
Bears Are Back
Upon MicroStrategy’s Monday announcement about its latest BTC purchase, the largest cryptocurrency by market cap skyrocketed to over $100,000 and beyond $102,000 for the first time this year. However, that relief rally was short-lived and the asset slumped hard in the following days, dumping by more than ten grand at one point without 48 hours.
The culmination came on Thursday when bitcoin dumped to $91,250 (on Bitstamp), which became its lowest price level since late November 2024. The bulls finally intercepted the nosedive at this point and didn’t allow a further decline below $90,000 despite multiple warnings by prominent analysts.
Naturally, the crowd turned bearish following such a massive crash, with the Fear and Greed Index going back to neutral on Friday for the first time since October. Such fluctuations for the metric typically showcase a big move in either direction and suggest an upcoming move in the opposite.
Is That Good News?
The crypto analytics resource Santiment has frequently suggested that BTC tends to move in the opposite direction of the crowd’s expectations. This means that in times of uncertainty similar to now when retail is going bearish on social media, the cryptocurrency proves them wrong with a notable price surge and vice versa.
Such was the case in early December 2024 when bitcoin tumbled again from over $100,000 toward $90,000. In the following weeks, though, the asset reversed its trajectory and even registered a new all-time high of over $108,000 on December 17.
Consequently, Santiment suggested that the latest developments could be another hidden bullish sign, especially if the crowd remains this pessimistic.
Crypto has been a slight let down for traders over the past week, and we have been seeing higher than usual mentions of selling interest. Just like we saw throughout the Q4 bull rally, when the crowd begins to get too bearish, higher prices become much more likely. pic.twitter.com/0U9qZky2ko
— Santiment (@santimentfeed) January 11, 2025
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