Investors’ Euphoria Should Stay Low Despite Bitcoin’s Price Surge, Research Suggests
Today, Santiment tweeted about Bitcoin’s rise in price above $44k for the first time in the past three weeks. Ethereum and most other altcoins have also increased in prices. However, Santiment noted that too much excitement could cause problems for the prices.
Bitcoin, Ethereum Rise Above Key Resistance
Earlier today, Santiment feed reported that Bitcoin had risen above $44k. Santiment feed is a network created to provide insight into the performance of crypto assets in financial markets. Santiment tweeted, “#Bitcoin has risen above $44k for the first time in 3 weeks, and is dancing around this level.”
After hitting the $44.7k mark three weeks ago, BTC went into a severe bear season. Coinmarketcap indicates that BTC lost value to about $37k. Bitcoin has been rising for the past few days but only hit the strong resistance at $44k today. Still, BTCs’ long-term support remains at about $35k. By surpassing the resistance, BTC could easily break to higher prices soon.
While Santiment only mentioned Bitcoin in their tweet, many other crypto assets had similar jumps recently. Ethereum, the second-largest crypto asset, gained over 4.5% in the past 24 hours. ETHs price patterns in the past three weeks have been almost similar to BTCs. On March 22nd, Ethereum hit the $3k mark for the first time in 3 weeks. Today, Ethereum broke even further to $3.1k.
Trading Crowds Euphoria Lead to BTC Price Drops
When reporting Bitcoins performance, Santiment noted that trading crowds will play a significant role in what happens after the price surges. Santiment tweeted, “The trading crowd plays a major role in what happens after $BTC and other assets finally make it past a key resistance level, so we want euphoria staying low.”
The trading crowd is seen from the social volumes which refer to discussions, mentions, and crypto-related activities in social networking platforms. Santiment follows such data mainly on three social networking sites: Twitter, Reddit, and Telegram.
According to their charts, the social volumes around the crypto space have constantly been changing in the past three weeks. The relationship between social volume and price changes is well justified in the Santiment chart.
Historically, investors celebrating bitcoin price surges have led to severe price plunges. For instance, on February 7th, Bitcoin hit $44k, and the social volumes hit 99. What followed was some price plunge to about $36k with the social volume dropping to 4rth. Again, on March 2nd, Bitcoin hit $44k, and the social activity hit 78. Later, the prices dropped.
In today’s instance, Bitcoin hit $44k, and according to Santiment, the social volume hit 90. The cases seen in the chart prove that the trading crowd and crypto prices have a relationship.
According to coinmarketcap, there are already high confidence levels in BTC and ETH-related pools. While the ETH/BTC pool volumes have increased by 0.6%, BTC/ETH pools have reduced by about 0.6%. This could indicate that investors are already trading their BTC for ETH. Hence, there is already excitement around BTC prices. Therefore, Santiment asks that the investors should keep the Euphoria low.
Performance of Other Altcoins
Altcoins have also not remained behind in the recent market surge. Most of the crypto space is in a bullish trend. Coins like BNB, SOL, ADA, XRP, DOT, and many others have also gained some value in the past few hours.
While some have recorded tiny changes, others like Axie infinity have gained over 20%. These price actions by cryptos and altcoins could indicate an upcoming long bullish statement.
