Buying Opportunity? Investors Sentiment for Bitcoin and Ethereum Turns Short-Term Bearish

The recent adverse price developments for the top two cryptocurrencies by market cap have caused a mood swing among investors. Data shows that the crowd sentiment towards Bitcoin and Ethereum has dropped to extreme negativity as both assets slumped by about 10% in a few days.

Sentiment Towards BTC and ETH to New Lows

Bitcoin and Ethereum went through steep retracements in the past several days. The primary cryptocurrency failed to overcome $60,000 despite initiating several attempts, and the subsequent rejections drove it to a ten-day low of $55,500 yesterday.

ETH’s price performance seemed significantly more bullish. The second-largest digital asset reached a new ATH two days ago at $2,150. However, it also retraced heavily by losing more than $200 in the following 48 hours to a low of $1,940.

Despite recovering some ground since then, these developments have caused a massive mood swing among cryptocurrency investors. Data provided by the analytics company Santiment indicated that the general sentiment toward the two assets has “dropped to extreme negative territory.”

History shows that similar rapid mood changes could actually indicate a short-term market top or bottom. The graph above demonstrates that when the general sentiment was exceptionally high after price increases, as it happened in late January and mid-February, the trend reversed somewhat immediately.

Consequently, Santiment has classified the current negative state as a “bullish opportunity” for buyers.

Fear and Greed Says It’s Not That Bad

The Fear and Greed Index is another metric that could provide the investors’ sentiment towards the cryptocurrency field. It calculates various types of data, including surveys, social media, volatility, and volume, to determine whether the general mood is positive or negative towards Bitcoin.

The final results range between 0 (extreme fear) and 100 (extreme greed). Somewhat expectedly, the index was well in the extreme greed phase in the past few months, as BTC more than doubled its value since January 1st.

With BTC stuck beneath the $60,000 line, the index declined slightly, but it has still remained above 50 – meaning that it’s still in greed territory. This attests that the cryptocurrency space is prone to quick mood changes, which goes hand in hand with the highly volatile nature of all assets.

It’s worth noting that while prices have retraced slightly lately, BTC’s fundamentals have become even more robust. As reported earlier, Bitcoin’s network continues to increase its security as the hash rate marked yet another all-time high record.

Calm After the Strom: Bitcoin Reclaims $57K and Ethereum Above $2K (Market Watch)

Bitcoin dipped to its lowest point in over a week beneath $56,000 but has recovered some of the losses and currently stands above $57,000. Most altcoins have retraced even harder, including a double-digit price drop for the high-flying Ripple (XRP) and Ethereum briefly dropping beneath $2,000.

BTC’s Dominance Increases Despite the Drop

The past several days didn’t go all that well for the primary cryptocurrency. After failing to overcome $60,000 on numerous occasions, the asset reversed its trajectory and headed south.

Bitcoin reached $59,400 on Thursday, but its inability to sustain the upward momentum gave the bears an opportunity to push it down, which led to a $4,000 price drop in less than 48 hours.

Yesterday was an especially harmful trading day for BTC as it slumped to a low of about $55,500. This was the lowest price line since late March.

It’s worth noting that this retracement came as the South Korean kimchi premium normalized following a yearly high. As CryptoPotatoreported, such developments typically lead to a price drop.

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Nevertheless, the cryptocurrency bounced off and has regained more than $1,500 since its low. As of writing these lines, BTC stands just above $57,000.

On the positive side, the altcoin market has retraced even harder. Consequently, bitcoin’s market capitalization has recovered a little less than 1% and stands around 55% after dipping below that level yesterday.

Altcoins Deep in Red

The alternative coins were on a roll in the past week or so, registering new records. Ripple was among the best performers by adding 100% of value in that timeframe, reaching a 3-year high at over $1,10, and becoming the 4th largest cryptocurrency by market cap.

However, XRP has retraced with about 11% since yesterday, despite the company’s CEO claiming that the court hearing against the SEC went well for the payment processor.

Ethereum dropped below $2,000 but has jumped slightly and currently stands at $2,020. Binance Coin (-2%), Polkadot (-4%), Cardano (-6%), Uniswap (-2%), Litecoin (-5%), and Chainlink (-5%) are also in the red.

The situation with the lower- and mid-cap altcoins is significantly more volatile, as one could expect. Helium (-15%), Ontology (-14%), Qtum (-14%), NEM (-12%), EOS (-12%), Waves (-11%), and Bitcoin SV (-10%) have also retraced with double-digits.

On the other hand, WazurX (37%), 1inch (23%), Enjin Coin (23%), Harmony (21%), PancakeSwap (12%), Yearn.Finance (12%) and Conflux Network (10%) have gained the most since yesterday.