Data shows that Bitcoinย (BTC) investors arenโt displaying the โbuy the dipโ mentality, regardlessย of the digitalย currencyโs price registering a hit recently.
Bitcoinย (BTC) Market Isnโt Showing Any Interest In Buying This Dip
Reportsย by data from the on-chain analytics company Santiment, the kind of FUD thatโs present in the Bitcoinย (BTC) market atย thisย time has historically provided good opportunities for the asset.
The indicator of interest here is the โsocial volume,โ which measures the total amount of social media text documents that are asย ofย now talking about a given topic or term (like the name of a cryptocurrency).
The text documents here are a collection of text-based posts that Santiment has amassed from some trending social media websites like Reddit, Twitter, and Telegram.
To know whether one of these posts is talking about a topic or not, the metric runs a check against the term and finds if thereย is at least one mention present in the stated document.
The condition of being just one mention impliesย that posts that contain the term plentyย of times still carry the same weight as one that does it only once. The reasoning behind this restriction isย theย factย that it provides for a more accurate representation of the tendency in the market, as severalย users canโt easily skew the figure.
Now, here is a chart that shows how much of the total digitalย currency social volume (that is, the discussions related to the sector) is being contributed by talks related to buying the dip:
The value of the metric appearsย to have declined in recent weeks | Source: Santiment on Twitter
As displayed in the over graph, the social volume for terms related to buying the dip has gone down recently, regardlessย of the price of Bitcoinย (BTC) observing a drawdown below the $27,000 level.
Back in March, when the investment had plunged below the $20,000 level, the indicatorโs value had seen some spikes, but they were still at only moderate levels. Andย once the price had recovered and had seen a sharp rally, onย theย otherย hand, thatโs when the metric started to spike.
This would suggest that there was little enthusiasm in the market when the actual bottom formation was taking place, while the obstacles in the rally were being lauded as the time to buy.
A large amount of the spikes likewise tookย place when that leg of the rally was topping out over the $28,000 level, meaning that the price went against the crowd mentality in this case.
Historically, Bitcoinย (BTC) has traditionally become more potential to move in the direction that the majority isnโt expecting, the more the majority predicts the other direction.
Since the social volume of these dip-related terms has remained low during theย pastย few price decline, it appears that the investors are afraid of buying at theย present levels.
โWe are seeing the common paradox of traders buying short-term, small cryptocurrency price dips, but scared to buy the longer-term bigger ones,โ notes Santiment. โHistorically, this kind of FUD has been good to capitalize on.โ
Bitcoin Price
Atย theย timeย ofย publication, Bitcoinย (BTC) is trading around $26,400, down 1 percent in the last week.
Looks like Bitcoin persistsย to be stuck in the low $26,000 levels | Source: BTCUSD on TradingView
Featured image from iStock.com, charts from TradingView.com, Santiment.net
