The bull market sentiment, aided by rising prices, has also led many analysts to believe bitcoin prices are at a bottom.
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It hit a four-month high above $21,000 in the third week of January, embellishing traders’ hopes. The rise in BTC prices in January witnessed the most investor optimism in the market since July.
According to data from crypto analytics firm Sentiment, sentiment from the trading public has touched its highest in six months and the second most bullish touch in the past 14 months. The data suggests that traders see the rise in the price of bitcoin as a sign of a potential big breakout in the near future.
The term “crowd/investor sentiment” describes how investors generally feel about a specific asset or financial market. It refers to the mood of the market, or the psychology of its participants, as expressed by changes in the activity value of the assets of exchange in that market
Bitcoin weighted social sentiment Source: sentiment
The chart above shows three major increases in investor sentiment since 2021. The first major spike in sentiment occurred in November 2021, followed by BTC hitting a new all-time high of $68,789 and the second major increase in July 2022 from the United States Federal Reserve to a possible easing of inflation The signals fell apart, followed by a modest rebound in prices although the price rise after the increase in crowd sentiment in July 2022 was not very significant due to the market-wide bearishness, traders did buy the dip to $19,000
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The latest rise in crowd sentiment followed a long winter in 2022. Market analysts believe that the rise in BTC prices could signal a market bottom. According to independent market analyst Hornhairs, the bottom-to-top-to-bottom time since 2015 has been flat at 152 weeks and 52 weeks, respectively
Examining Bitcoin’s long-term price behavior, the previous cycle’s up and down runs look surprisingly similar. What’s more interesting is that the 2020 to 2021 cycle seems to follow a similar trend.