• Bitcoin’s price climbed to a four-month high above $21,000, boosting trader’s hope and leading to the highest investor optimism since July.
• Data from crypto analytics firm Santiment indicates that the crowd sentiment has touched its highest in six months and second highest bullish sentiment in the past 14 months.
• The market sentiment is being treated as a signal of a possible bigger breakout in the near future.
The world of cryptocurrency was filled with anticipation in the third week of January when Bitcoin BTC $21,067 surged to a four-month high above $21,000. As the price of the world’s leading cryptocurrency started to rebound, investors’ sentiment also began to swell and the market saw the most substantial optimism since July. Data from crypto analytics firm Santiment showed that the crowd sentiment has reached its highest in six months and second highest bullish sentiment in the past 14 months, signifying that traders are treating Bitcoin’s price rebound as a signal of a possible bigger breakout in the near future.
The term “crowd/investor sentiment” is used to describe how investors generally feel about a specific asset or financial market. It refers to the mood of a market, or the psychology of its participants, as expressed by activity and changes in the price of the asset exchanged in that market. The chart below shows three major spikes in investor sentiment since 2021, with the first major spike in sentiment coming in November 2021, followed by the BTC price surge to a new all-time high of $68,789. The second major spike came in July 2022 amid hints from the United States Federal Reserve about possible inflation ease, followed by a minor price surge.
The bullish market sentiment has also let many analysts believe that the Bitcoin price bottom is in. This sentiment has been further bolstered by the increasing institutional interest in Bitcoin, as well as the rising adoption of digital currencies. The current market dynamics have all the potential for a further price surge, with traders hoping that the price of Bitcoin will go even higher from here.
It is clear that Bitcoin’s price rebound has brought a surge of investor optimism, which could lead to further price surges in the near future. With the market sentiment at an all-time high, it is possible that the world’s leading cryptocurrency will reach even higher heights if the current market dynamics remain unchanged.