According to data from a technology analyst from Fundstrat by Tom Lee, Bitcoin is very likely to bottom out
Cryptocurrencies had a bad start to 2022 as the market was like a pit dragging the price down dramatically and hurting investor morale. Emotions may seem unimportant in the cryptosphere, but they often portend luck or the end. So, it’s time to look at the two major cryptocurrencies, BTC and ETH.
analysis Sigmund Freud
Analytical platform Santiment recently noted that despite a modest price rally, traders have chosen to be cautious as fear still grips the market. Note the weighted sentiment for Bitcoin and ETH, both in the “fear zone” below -0.5 at press time.
While this may sound bleak, Santiment reminds its followers that negative emotions can sometimes trigger a price spike.
📈 #Bitcoin is over $38,000 again & #Ether is up to $2,580. There is still a long way to go until mid-November #all-time high levels. But traders seem quite dubious. This negative mood will most likely lead to further price increases. https://t.co/lKiJH6YjlF pic.twitter.com/awRgaiQjSS
— Santiment (@santimentfeed) January 30, 2022
“Bitcoin is back above $38,000 and ETH at $2,580. There is still a long way to go to the all-time highs of mid-November, but traders are skeptical. This negative sentiment will most likely drive prices higher.”
Another metric that can provide an accurate view of how sentiment converts to activity is web speed.
On Jan. 29, Bitcoin’s speed was around 0.044, meaning the asset’s activity is close to levels last seen in November 2021 before the crash. However, it is still low compared to the September 2021 surge.
speed of Bitcoin | The source: glass node
Regarding ETH, we can see that the velocity is around 0.02 on Jan. 29 after rising a few days ago. What is interesting here, however, is that while the ETH price rose, the speed started falling again. This could be a sign that investors are in no hurry.
speed of ETH | The source: glass node
investors ETH rather pessimistic
report CoinShares’ Digital Asset Fund Cash Flow Weekly gives us a sharper picture of BTC and ETH transfers in and out of exchanges. After 5 weeks of total outflows, a small inflow finally materialized in the week ended January 21st.
However, not all cash flows are created equal. While Bitcoin saw an inflow of around $13.8 million, ETH saw an outflow of $15.6 million.
“The current 7-week outflow totals $245 million, or 2% of assets under management, showing that much of the recent bearish sentiment among investors is centered on ETH rather than Bitcoin.”
What does this mean for investors? While both Bitcoin and ETH bulls are feeling a bit weak right now, Bitcoin investors appear to be looking to buy more than their ETH counterparts.
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According to AMBCrypto