Bitcoin Dip Worth Buying? What Market Sentiment Suggests

The current sentiment among Bitcoin investors may hold the key to understanding whether the current drop is a buying opportunity or not.

“Buy The Dip” Optimism Is Fading In The Bitcoin Market

In a new insight post, the on-chain analytics firm Santiment has looked into how the trader sentiment has shifted in the BTC sector since the crash a few days back.

Related Reading: Will Bitcoin Retest $20,500 Again? This Pattern May Suggest So

First, the analytics firm has checked for the amount of “buy the dip” types of calls that have been happening on social media recently.

Looks like the value of the metric had been quite high not too long ago | Source: Santiment

Here, Santiment has made use of its “social volume” metric, which finds the unique number of social media posts that are making mentions of a given term or topic.

Naturally, the social volume for Bitcoin/cryptocurrency is taken here, and has then been filtered for terms like ‘buy’ and ‘dip.’ From the chart, it’s visible that the social media users were participating in some heavy discussion around such topics just when the Bitcoin crash toward the $26,000 level occurred a few days ago.

This implies that the traders were optimistic that the asset would quickly recover and they believed that the drop presented an ideal buying opportunity.

As the asset has only continued to move sideways since the crash, however, optimism on social media has appeared to have slowly vanished, as ‘buy the dip’ calls have plunged. However, this is not all bad news as Santiment points out.

“Believe it or not, it’s a good sign that people are no longer certain that this is a dip buy spot,” explains the analytics firm. “It means that pessimism is beginning to take over again as market caps fade.”

Historically, bottoms have become more probable to form the more pessimistic about the market the majority of the traders have been. Thus, this development can potentially allow the coin to recover.

In terms of the social volume broken across the major social media platforms, it would appear that Redditors have still not given up hope for a reversal.

Buy the dip calls on Telegram, Reddit, Twitter, and 4chan | Source: Santiment

While the overall market sentiment may have cooled down, it would seem that it hasn’t yet happened on all platforms equally. But it may provide a unique opportunity for a good entry point.

“When all four social platforms align and have…