Bitcoin (BTC) surged to a four-month high above $21,000 in the third week of January, embellishing traders’ hopes. The market has registered the highest investor optimism since July due to the ongoing BTC price rally.
According to data from cryptocurrency analysis firm Santiment, trader sentiment has reached its highest level in six months and the second highest bullish sentiment in the last 14 months. The data indicates that traders are treating the rally in Bitcoin’s price as a sign of a possible bigger breakout in the near future.
The term “public/investor sentiment” describes the general opinion of traders about a certain asset or financial market. Refers to the mood of a market, or the psychology of its participants, as expressed by the activity and changes in the price of the underlying asset in that market.
The chart above shows three major spikes in investor sentiment since 2021. The first major rally occurred in November 2021, followed by a rally in the price of BTC to a new all-time high of $68,789. The second major rally occurred in July 2022, amid hints from the US Federal Reserve about a possible easing of inflation, followed by a small rise in price. Although the price rally after the rally in public sentiment in July 2022 was not very significant due to the bearish sentiment across the market, traders bought the dip to $19,000.
The latest uptick in crowd sentiment came after a prolonged winter in 2022. Market analysts believe that the BTC price rally could mean that the market has already bottomed out. According to independent market analyst, HornHairs, the time from trough to peak and from peak to trough has remained constant since 2015 at 152 weeks and 52 weeks, respectively.
$BTC #Bitcoin
2015-2017 bull market: 1064 days
2017-2018 bear market: 364 days2018-2021 bull market: 1064 days
2021-*current* market low: 364 daysDays left until the top if we just carbon copy the cycle timeframe again: 1001 days pic.twitter.com/KoNZxJRuy5
—HornHairs (@CryptoHornHairs) January 12, 2023
The race to the top and the bottom of previous cycles look strikingly similar when examining Bitcoin’s long-term price action. Most intriguingly, the 2020 to 2021 cycle appears to be following a similar trend.
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