Markets
Bearish Bitcoin Social Sentiment Signals Potential Market Bottom
- Recent bearish market conditions have significantly dampened the bullish sentiment surrounding Bitcoin, with notable declines in positive commentary on social media platforms potentially signaling a market bottom.
- Additionally, Bitcoin miner withdrawals have decreased by nearly 90% since the block subsidy was halved, indicating weakening selling pressure.
Recent bearish market conditions have significantly tempered the previously high levels of optimistic sentiment and euphoria surrounding the price of Bitcoin, potentially signaling a market bottom.
In recent weeks, data from cryptocurrency analytics firm Santiment reveals a notable decline in bullish comments about Bitcoin on social media platforms such as X, Reddit, Telegram, 4Chan and BitcoinTalk.
Since the Bitcoin halving in April, the price of BTC has been trading sideways. According to data from Santiment, trader sentiment was largely bullish in early April, ahead of the bitcoin halving event.
Courtesy: Santiment
With Bitcoin failing to reach new all-time highs, optimism has been waning over the past three months as traders have lost confidence in the market. The only good thing lately is that as bullish calls have declined, bearish calls have also declined, but not by as much.
This is because, as reported According to CNF, Bitcoin miner capitulation has been very strong in the past few months following the halving. Bitcoin miners have been selling heavily to cover their operating costs, which have increased significantly with the reduction in mining rewards following the halving.
Bitcoin analyst Willy Woo noted that BTC price recovery typically follows “weak miners dying and the hash rate recovering.” He noted that in 2017, hash rate recovery took 24 days, while in 2021, it took just eight days. According to Crypto News Flash reportrecovery has already lasted 61 days in 2024.
Bitcoin Miner Selling Pressure Eases
According to recent data, Bitcoin miner withdrawals have dropped by nearly 90% since the block subsidy halving. In a Quicktake post on June 28, on-chain analytics platform CryptoQuant indicated that the mining company’s selling pressure is “weakening”.
Network fundamentals showed a reshuffle, with hash rate and mining difficulty decreasing from their all-time highs. CryptoQuant contributor Crypto Dan explained:
After the Bitcoin halving, mining rewards were halved, so older mining machine models were no longer used as they were no longer economical. As a result, mining activity decreased and miners began selling Bitcoin in OTC transactions to cover the costs of mining operations.
According to the popular Hash Ribbons metric, hash rate indicates “capitulation” among miners, with the 30-day moving average hash rate below its 60-day counterpart.
While this scenario is typically seen as a buy signal by Bitcoin traders, Crypto analyst Dan believes the capitulation process is coming to an end.
“The current market is digesting this sell-off and fortunately, the amount of bitcoins that miners are sending out of their wallets has been decreasing rapidly recently,” he noted. The analyst also stated:
In other words, the miners’ selling pressure is weakening and if all their selling volume is absorbed, a situation could be created where the upward recovery could continue again.
At the same time, spot Bitcoin ETF outflows fell last week, which is a healthy sign, according to CNF to update.
At press time, the price of Bitcoin is down 0.88% to $60,876, with a market cap of $1.2 trillion. On the weekly chart, the price of BTC is down 5.3%.
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