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.

Signal Turns Into Noise With MobileCoin Integration
Signal Turns Into Noise With MobileCoin Integration 101
Source: Adobe/natanaelginting

Private messaging app Signal, which is also popular among crypto users, announced they’re launching payments using MobileCoin (MOB). But then things turned sour.

Per the April 6 announcement, this is a beta feature in Signal Beta, available to the United Kingdom folks for testing and feedback purposes. They plan to expand the beta following more feedback.

Privacy-focused payments network MobileCoin, which uses the Stellar (XLM) Consensus Protocol (SCP) to synchronize a ledger, is the first payments protocol for which Signal added support, enabling a MobileCoin wallet to be linked to the messaging app in order to send/receive funds, monitor balance, and review transaction history. It’s currently possible to convert to/from the MOB token on crypto derivatives exchange FTX, with other exchanges coming soon, they added.

Signal does not have access to a user’s balance, full transaction history, or funds, they claimed, while users can transfer their funds “at any time” if they want to change services. Per Business of Apps data, Signal had 40m users in January this year.

But the reaction to this rollout wasn’t entirely positive. Some claimed that Signal is “dabbling in shitcoin pump,” and others added that Signal “has alienated all Bitcoiners” with this move.

just setting up my twttr

— jack (@jack)

Other criticism includes comments that Signal creator Moxie Marlinspike is using Signal to pump his MOB bag. Marlinspike has also been a technical adviser for MobileCoin.

However, he told WIRED that neither he nor Signal own any MOB tokens.

In 2018, the project announced a fundraising round led by Binance Labs for USD 30m denominated in ethereum and bitcoin. Per TechChrunch, the payments network recently raised USD 11.35m in funding across two rounds from Future Ventures and General Catalyst.

Furthermore, Marlinspike is listed as Chief Technology Officer in the MobileCoin whitepaper.

And speaking of the whitepaper, developer Tadge Dryja said that he found a MobileCoin whitepaper, which is reportedly just a copy of the ‘Zero to Monero’ paper with a few changes.

Others made similar allegations, such as Riccardo Spagni, the former lead maintainer of Monero.

just setting up my twttr

— jack (@jack)

BlockTower Capital founder Ari Paul, however, commented that MobileCoin is not a fork of Monero, and that Spagni’s claims can’t be used as proof to the contrary as he’s “an altcoin [developer] criticizing competition.”

This was a part of a longer technical discussion and disagreement over the project’s specifics.

Per Marlinspike himself, “Signal chose to integrate MobileCoin because it has the most seamless user experience on mobile devices, requiring little storage space on the phone and needing only seconds for transactions to be confirmed.”

The market situation caught the eye of analysts and traders, including Eric Wall, the Chief Investment Officer of the crypto hedge fund outfit Arcane Assets, who likened MobileCoin to an inedible footlong sandwich filled with a bunch of random ingredients.

just setting up my twttr

— jack (@jack)

At 14:32 UTC, MOB trades at USD 40 and is down by 38% in a day, erasing almost all its weekly gains. The price is still up by 648% in a month.