A surge in “buy the dip” discussions on social media following a 5% drop in Bitcoin over the past week might indicate potential further declines in the crypto market, according to sentiment platform Santiment.
“Overall, in the markets, there’s a sense of unease as people seek entry points now that prices have decreased a bit,” said Santiment analyst Brian Quinlivan in a video posted on YouTube on Saturday.
Santiment mentioned in a separate report released on the same day that the social media activity around “buy the dip” has risen significantly during the recent downturn, which could serve as a warning for the market. said
“Don’t view ‘buy the dip’ discussions as a definitive signal for a market bottom. A genuine market floor usually occurs alongside widespread fear and a decrease in buying interest,” Santiment noted.
“An authentic bottom often takes shape when the crowd becomes disheartened and hesitant to buy,” Santiment added.
Market sentiment is improving as traders await altcoin season
The overall cryptocurrency market capitalization stands at $3.79 trillion at the time of publication, having decreased roughly 6.18% over the past week, according to CoinMarketCap.
At the time of publication, Bitcoin (BTC) is priced at $108,748, down about 5% during the same timeframe. On Aug. 14, Bitcoin reached a new high of $124,128.
Crypto analysts often suggest that prices tend to move in the opposite direction of retail traders’ expectations, and history indicates that when more traders believe the market has bottomed, it may signal additional declines.
Market sentiment is gradually improving, as the Crypto Fear & Greed Index has risen to a “Neutral” score of 48 out of 100 on Sunday, after dropping to “Fear” at 39 out of 100 the day before.
Some traders speculate that the crypto market’s retreat from Bitcoin’s recent highs could indicate that the anticipated altcoin season is near.
“Mega altseason” could be on the horizon, according to trader
Crypto trader Ash Crypto noted in a post on X that “Altcoins are now more oversold than ever.”
“Even during events like the Covid crash, FTX collapse, or tariff wars, they weren’t this oversold,” the trader remarked, suggesting this might signal a “mega altseason” reminiscent of the significant rallies in 2017 and 2021.
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On Thursday, CoinMarketCap’s Altcoin Season Index transitioned from “Bitcoin Season” to “Altcoin Season,” reaching a score of 60 out of 100 at publication time.
Meanwhile, crypto trader Ak47 stated that with a “potential Fed rate cut and altcoin ETF approval this fall, the next rally could be monumental.”
CME’s FedWatch Tool indicates that market participants expect an 86.4% chance of the US Federal Reserve cutting interest rates for the first time this year in September, typically viewed as a bullish sign for crypto as investors seek higher returns in riskier assets.
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