Bitcoin investor sentiment slumps to a new low, even as macro and equities show improvement

Bitcoin (BTC) surpassed the $30,000 resistance on June 21, or 40 days ago, after a notable 19.5% gain in a week. Since then, it has been moving within a range filled with occasional moderate corrections and BTC price trades near $29,300. While these consolidation periods are common in traditional markets, they tend to make crypto investors quite anxious.

As Bitcoin’s price repeatedly fails to break the $31,000 level, traders are becoming increasingly tense and their sentiment is worsening. This trend could reverse suddenly, regardless of any relevant news or macroeconomic factors that might support an upward move andcrypto traders’ emotions can magnify positive and negative price swings, leading to euphoric and fear-led price action.

Bitcon’s low volatility sessions have traders worried

The increased anxiety among traders is partly due to Bitcoin’s historical volatility, which used to be much higher than its current levels. Presently, the 33% annualized 50-day volatility is the lowest in 6 months, contrasting sharply with the 60% or higher volatility observed for 245 days throughout 2022. Despite the rationale for this shift, the recent period has been relatively calm for Bitcoin’s price.

To put it in perspective, consider that auto and electric battery producer Tesla (TSLA), a top-10 global asset and part of the S&P 500 index, currently experiences a 58% annualized volatility. In comparison, graphics chipmaker NVidia (NVDA) has consistently demonstrated a 70% or higher volatility for most of 2021.

While some analysts use volatility data to predict trends, it’s essential to note that this indicator relies on absolute price changes, yielding the same outcome for both upward and downward price swings. Therefore, volatility only provides information about the magnitude of daily oscillations.

However, apart from price changes, there are other metrics that can indicate investors’ excitement or lack of interest in an asset, such as evaluating its market share or market dominance.

Bitcoin dominance shows declining interest relative to altcoins

On July 30, Bitcoin’s market share in the total crypto capitalization dropped to 49.5%, the lowest figure since June 16.

This decline can be partially attributed to a favorable legal decision for Ripple Labs on July 13, which reduced regulatory risks for altcoins. Industry representatives believe this decision will benefit crypto exchanges Coinbase and Binance in their…