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Bitcoin Bullish Sentiment Is in ‘Severe Decline’
According to analysts at market intelligence platform Santiment, positive sentiment around Bitcoin has suffered a “severe decline.”
Thursday, while Bitcoin (BTC) has struggled to recover its recent upward trajectory, Santiment shared that funding rates suggest a surge in bearish bets.
“Positive sentiment toward Bitcoin has plummeted despite the mid-market cryptocurrency rally this week. Many traders, especially on Binance, are opening short positions in anticipation of a fresh decline in BTC,” the platform wrote.
Bullish comments on the price of Bitcoin have fallen to about a third of the rate seen four months ago. The data also shows that traders are increasingly betting against a near-term rise in BTC.
📊 Positive comments about Bitcoin have plummeted despite the mid-sized cryptocurrency market rebounding this week. Many traders, especially on @binanceare opening short positions with the expectation of a new decline in BTC. Both of these factors increase the probability of a rise in the cryptocurrency. photo.twitter.com/50Z1TvJpUx
— Santiment (@santimentfeed) July 18, 2024
Bitcoin Holders Withdraw BTC From Exchanges
Bitcoin’s surge to $66,000 earlier this week has given way to a decline to around $63,380. The price has fallen just over 2.5% in the past 24 hours, which notably, is what Bitfinex analysts said would likely happen as highlighted in our previous coverage.
While positive sentiment has diminished and traders are increasing short positions, Santiment suggests that these factors “increase the likelihood of the cryptocurrency moving higher.”
Cryptocurrency analyst Woo Minkyu noted in a send Bitcoin holders recently withdrew massive amounts from exchanges on Thursday. This happened on July 5, when BTC dropped below $54,000, a scenario that coincided with massive selling pressure from the German government and initial transfers of BTC from Mt. Gox.
At the time, holders withdrew $3.8 billion worth of BTC from exchanges, helping push prices up from around $56,000 to over $65,000.
This week, on July 16, Bitcoin holders once again flocked to exchanges, withdrawing another $3.4 billion in BTC. Shorts were caught off guard after this, although the flagship cryptocurrency has dropped again in the last 24 hours amid new sentiment driven by Mt. Gox.
Although prices have fallen from their weekly highs, this move in BTC from exchanges suggests that holders are planning to hold their positions on the exchange (HODL), which has often had a positive impact on prices.