Bitcoin’s Market Sentiment

Bitcoin’s derivatives metrics looked optimistic.
But selling pressure remained dominant in the market.

Bitcoin (BTC) has been struggling with its price action as it has failed to satisfy investors of late. This has sparked fear in the entire community, as suggested by the latest datasets.

However, this panic in the market could have the potential to turn things around for the king coin.

Bitcoin Investors Are Panicking!

Bitcoin’s price witnessed an over 11% correction last week, pushing its price under $95k. In fact, AMBCrypto reported earlier that as we approached the Santa Claus rally, which historically has pushed the crypto market up, Bitcoin was struggling.

At the time of writing, the king coin was trading at $94,078 with a market capitalization of over $1.86 trillion.

Interestingly, despite the double-digit weekly correction, only 1.98 million BTC addresses were “out of the money,” accounting for less than 4% of the total number of Bitcoin addresses, according to IntoTheBlock’s data.

Amidst all this, Santiment, a data analytics platform, highlighted a notable development in a tweet. According to the tweet, the crypto markets opened the week with further retracement, instilling panic among retail investors.

Particularly, Bitcoin and Ethereum (ETH) are experiencing massive fear, uncertainty, and doubt (FUD) from newer traders who joined the markets in the past 2-3 months.

The tweet mentioned,
> “Historically, when retail traders begin to sell based on panic and emotion, whales and sharks have opportunities to scoop up more coins with little resistance, creating bounces.”

Therefore, there is a high possibility of a trend reversal as we count the remaining days of this year.

Will BTC Register Gains Soon?

According to our analysis of CryptoQuant’s data, selling sentiment remains dominant in the market, evident from the increasing exchange reserves. However, Santiment’s tweet mentioned that if whales scoop up BTC, it could trigger a reversal, but this was not occurring at present.

Bitcoin’s number of addresses with balances exceeding $1 million declined sharply last week, indicating that big-pocketed players were also selling their holdings, which can cause further trouble for BTC in the coming days.

Nonetheless, conditions in the derivatives market looked bullish as BTC’s funding rate was increasing.

Read Bitcoin (BTC) Price Prediction 2024-25

An increasing funding rate in the crypto market means that the cost of holding long positions rises—a sign of bullish sentiment around an asset. The taker buy/sell ratio was also positive, indicating that buying sentiment was dominant in the derivatives market. If these metrics are accurate, then expecting a trend reversal for BTC isn’t too ambitious.