Crypto merchants are exhibiting peak confidence in shopping for the most recent market dip, however Santiment information suggests this optimism could also be a prelude to extra worth drops.
In response to the on-chain analytics platform, discussions about “shopping for the dip” have reached their highest degree in seven months, pushed by Bitcoin’s plunge beneath $80,000.
On the lookout for a True Backside
Santiment’s analysis revealed a pointy enhance in mentions of “shopping for the dip” throughout platforms like X, Reddit, Telegram, and BitcoinTalk, which all have thriving crypto communities.
The sentiment tracker recorded its highest degree of dip-buying discussions between February 25 and February 26, coinciding with a 27% drop in BTC’s worth.
Nonetheless, specialists have urged warning. In response to the analytics agency, markets have traditionally moved towards crowd expectations. It signifies that an actual restoration might solely start when dip-buying sentiment cools down, which might point out that enthusiasm amongst retail merchants has largely light.
Due to this fact, the platform suggested ready for the group’s optimism to die down earlier than contemplating a market entry, as that might sign a real shopping for alternative.
Additional exacerbating the state of affairs, the Bitcoin Worry & Greed Index not too long ago plunged to 10, its lowest studying since June 2022, indicating excessive worry amongst traders.
Whereas up to now, such lows often got here earlier than a market restoration, some analysts, together with BitMEX co-founder Arthur Hayes, have warned that the primary cryptocurrency might drop to the $70,000 degree earlier than stabilizing.
In a latest publish on X, the crypto investor predicted BTC’s fall beneath $80,000, suggesting it will occur over the weekend of February 28. “I believe now we have yet another violent wave down beneath $80k, probably over the weekend, then crickets for some time,” the Maelstrom CIO famous.
Market Turmoil Continues
On the time of this writing, the broader crypto market had hemorrhaged practically 9% of its capitalization within the final 24 hours. Bitcoin is down 7.4% in the identical interval and has shed greater than 19% from its worth over the previous seven days.
Solana, XRP, and Ethereum fared worse at the moment. SOL is down 27% over one week, XRP has dipped by greater than 24%, whereas ETH misplaced 23.1% of its worth.
Many reasons have been put ahead to elucidate this decline, with some observers pointing at macroeconomic issues, together with U.S. President Donald Trump’s tariff announcement on Canada, Mexico, and China, in addition to his menace to take comparable measures towards the European Union.
As merchants navigate this turbulent market, one factor is evident: extreme optimism may not be the bullish sign they could have hoped for.
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