The crypto market could be poised for a price rise going by historical market sentiment data pointed out by the crypto market intelligence tracking platform Santiment.
In a tweet, Santiment noted that fear, uncertainty, and doubt (FUD) in the crypto market had reached their most negative level in five months. This is indicated by the fact that conversations relating to crypto on all major social platforms, including Twitter, Reddit, Discord, and Telegram, are leaning towards a major bearish bias.
According to the analysis, such levels of negativity have historically increased the probability of future price rises.
“Conversations relating to current market conditions on Twitter, Reddit, Discord, and Telegram indicate a major #bearish bias. This historically increases the probability of future price rises,” Santiment said.
Meanwhile, the metric is not the only bearish indicator Santiment anticipates contributing to a crypto market price bounce. The platform has pointed out that the Bitcoin (BTC) market has been seeing many traders finally liquidate their assets as its price has fallen to a two-year low.
The massive exodus of investors has resulted in the BTC market seeing the lowest level of transactions made while in profit since Nov. 2019. According to Santiment, bounces also typically occur when this happens in the market.
FTX collapse is still the leading source of crypto market negative sentiments
The FTX collapse and the market contagion it sparked have continued to be the major cause of the crypto market’s unravelling in recent weeks. The market jitter has now reached Digital Currency Group (DCG) subsidiary Genesis, a liquidity provider to FTX.
According to a Bloomberg report, the crypto derivatives trading and lending firm has mentioned that it is considering filing for bankruptcy if it cannot raise around $1 billion in fresh funding from investors.
Aside from affected crypto firms, the collapse has been rocking the already shaky trust regulators had for the crypto market. U.S. Senators Elizabeth Warren, Tina Smith, and Richard Durbin recently wrote to Fidelity Investments to reconsider their plans to introduce Bitcoin exposure to workplace retirement plans it manages.
“The recent implosion of FTX, a cryptocurrency exchange, has made it abundantly clear the digital asset industry has serious problems,” the Senators said.
Meanwhile, U.S. Treasury Secretary Janet Yellen has stated that the failure of FTX and its impact on crypto investors “demonstrates the need for more effective oversight of cryptocurrency markets.”
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