Santiment, a popular web3 platform that provides crypto data intelligence tools for research, reveals the social sentiment data of Bitcoin indicating that a bull run is unlikely to happen.
According to the Santiment data, the bullish-to-bearish ratio among the posts is 1.8:1. There are 1.8 bullish posts for every bearish post, and this positivity always reflects greed in the index, leading to the price flow to opposites of the crowd’s expectations.
When Does the Bull Run Happen? The Crypto Market So Far
After the Fed’s meeting in July 2024, the USD stablecoin minting has increased, especially in the past two weeks. With 10 billion worth of stablecoins minted recently, traders expect a huge Q4 rally.
Another reason to believe in an exceptionally high Q4 rally is the increase in the number of web3 users. The social media marketing and the tap2earn frenzy have gathered a bunch of young and novice crypto traders to the market.
The crypto-influencers on YouTube are stronger than ever with a belief in an incredible bull run, and they have been generating millions of viewers. And, massive Telegram communities are expecting a major surge sparking FOMO across the web3 market environment.
But the increase in stablecoin necessarily doesn’t mean that it will be used to lift the crypto market cap. Also, there is a tendency for the market to travel the exact opposite of what social media believes in. When we examine the chart history regarding community sentiment, we can see that the over-expectations in the masses always resulted in market corrections,
How Does Social Sentiment Affect the Crypto Market?
When we look at the history of the crypto market, most of the bull runs are ignited by the slow progress of the positive market sentiment. Analysts use various tools like the fear and greed index (FGI), principal component analysis (PCA), and social media monitoring to calculate the sentiment.
But when the positive sentiment exceeds a level, the market always shows a correction. It can be visible in the charts of 2013, 2017, and 2021. High greed in the FGI is a great opportunity for early whales to cash out and start short-selling. The Santiment data highlights this possibility, and if the greed continues Q4 will see a huge correction.
Insights From the Santiment Data
According to Santiment, the user demand for altcoins has increased in the past few weeks. It is because of the speculation that after the BTC’s uptrend, usually, the altcoins follow the same pattern. This time though, the web3 exposure is huge in mainstream media, and the shifting positivity with an increased number of traders will ignite FOMO that will eventually break the uptrend.
More than the social media frenzy, huge institutional investors, independent whales, governments, and market makers are at play within the crypto market and the corrections will also depend on factors like war, elections, and climate uncertainty.
When social media was so positive about the Asian stock market last week, the Israel-Hezbollah war started small corrections in the chart. This may happen within the crypto space too, and a major event yet to happen is the US Presidential Election in November.
The Highly Volatile Crypto Market: How to Stay SAFU?
The major insight from the Santiment data is that we cannot trust social sentiment all the time. In fact, most of the time the majority is completely wrong when it comes to chart predictions. So, to stay safe in Q4, here are some suggestions:
- Read through the News: As we said earlier, practical events across the world affect the global economy, not some speculations in online media. The crypto market is also driven by global issues, and always try to stay updated early about the major happenings around. Also, try to grasp subtle hints inside the news, and train to attain the skill of determining which news will affect the charts.
- Invest with Caution: Invest in coins with use cases with most of your money. And, purchase small portions of meme coins and other trending coins to escape the FOMO. And, always try to do deep research of your own before choosing a coin to invest in. Also, make sure to set your stop loss. Don’t blindly trust the influencers and don’t go with the masses without verification.
Conclusive Remarks: The Upcoming Trends
As evident in the charts, the crypto market is so volatile, and it behaves with complete unpredictability. There are possibilities of the exact opposite flow happening than the one predicted by the Santiment. Various experts predict an inevitable 100K price for BTC in 2024 Q4 and others predict a recession to 42K.
The social sentiments always derive from the activities of inexperienced users and those who fantasize about huge earnings without delving into practical research. Influencers utilize this situation and add fuel to this fire. So, whenever there is too much social sentiment, be cautious about a sudden correction.
Finally, it is important to invest the money that you can afford to lose. Also, other than the logical plans and predictions, sheer luck matters here more. However, DYOR to aid your luck, and subscribe to our newsletter for the latest crypto insights and price predictions.
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