Market intelligence platform, Santiment, has reported a gradual decrease in traders’ optimism towards the leading assets in the crypto market over the last five weeks. According to a recent blog post, social data is pointing towards a trend that may witness a crypto bull run. The platform details social metrics and funding rates, highlighting the increased social fear, uncertainty, and doubt (FUD). The blog also discusses the current stance on the social prediction of traders and the funding rate side. Santiment claims to have conducted a backtest of several years’ worth of data and observed that prices tend to follow the least expected direction by the majority. As traders’ doubt increases, the chances of sustained price increases also go up.
Santiment has noted a decrease in the number of bullish and bearish signals from market participants. Additionally, there has been a decline in the number of people participating in discussions on social media platforms such as Twitter, Discord, Telegram, and Reddit compared to earlier in the year. According to Santiment, there is a small inclination towards long positions. They also observed that none of the top market capitalization assets they are monitoring exhibit indications of a negative funding rate when factoring in average rates across various platforms such as Binance, Bitmex, DyDx, and Deribit.
Santiment stated that this data is interesting considering what they see on social media, which has been more bearish in the last month. They also mentioned that the loudest voices in crypto have quieted down and have refrained from putting out bullish narratives.
The decrease in traders’ optimism towards leading crypto assets is a significant development for the market. It indicates that traders are becoming more cautious and less willing to take risks. This trend could lead to a further decline in prices, as traders may start to sell off their holdings. However, Santiment’s observation that prices tend to follow the least expected direction by the majority suggests that there may be a bullish trend on the horizon.
The decline in the number of people participating in discussions on social media platforms is also noteworthy. Social media has been a significant driver of market sentiment in the crypto space. A decrease in social media activity could indicate a decline in interest in the market. However, it could also suggest that traders are becoming more cautious and less willing to share their opinions online.
Santiment’s observation that none of the top market capitalization assets they are monitoring exhibit indications of a negative funding rate is also significant. A negative funding rate indicates that traders are willing to pay a premium to take short positions. This is usually a bearish sign for the market. The fact that none of the top assets are exhibiting a negative funding rate suggests that traders are not overly bearish on the market.
Overall, Santiment’s report paints a mixed picture for the crypto market. While traders’ optimism towards leading assets has decreased, there are signs that a bullish trend may be on the horizon. The decline in social media activity and the absence of a negative funding rate for top assets suggest that traders are not overly bearish on the market. However, the cautiousness of traders could lead to a further decline in prices if traders start to sell off their holdings.