Sentiments Could Turn in Favour of Bears Soon; Traders Turn Pessimistic on Markets-What’s Next?

The post Sentiments Could Turn in Favour of Bears Soon; Traders Turn Pessimistic on Markets-What’s Next? appeared first on Coinpedia Fintech News

The recovery that began at the start of 2023 carried huge hopes of maintaining a fine recovery throughout the year. Although the markets displayed bullish momentum, the trend continued to remain gloomy. Therefore, this uncertainty led to the traders being bewildered by the next price action. This has been one of the major reasons that prevent us from analyzing the next course of action for the Bitcoin price. 

In recent times, interest among market participants has waned to a large extent. As per the data from the on-chain data provider, Santiment, it can be concluded that the investors currently wish to remain silent without entering the markets. Buying the dip is among their primary reasons to do so. Therefore, a huge sentiment shift is being recorded at the moment, and the below-mentioned facts indicate that the traders now want the market to drop more. 

Shift in Market Sentiments

During the bullish cycle, when the cryptos undergo a significant upswing, the searches are also in favour of the bulls. For example, the searches for the terms buy, bought,”  etc. rise as the traders become optimistic about the markets. Presently, the levels have dropped heavily, indicating that traders are becoming more pessimistic and believe the bearish trend could prevail for a long time ahead. 

Bitcoin Social Sentiments Swing

Social sentiments are those that include the volume of searches related to Bitcoin over the various social media platforms. As per the data, with the drop in BTC prices last week, the community across Telegram, Reddit, Twitter, etc. has become more active. As social sentiment has dropped and the price has remained steady, it may be assumed that the community is not bullish on Bitcoin.

Bitcoin’s MVRV Ratio Plunges

MVRV, which is the comparison between Bitcoin’s market value and its realized value, has plunged heavily. It gives an idea of the fair value of the token, which suggests whether the current price is either overvalued or undervalued. The MVRV has plunged in the short term as well as in the long term, suggesting the price is undervalued and could remain so for a long time. 

Funding Rate Goes Negative

Monitoring the funding rate offers valuable insights into traders’ sentiments and market dynamics. A high funding rate often indicates bullish market sentiments, with long trades being placed with high interest and leverage. Presently, the funding rate on Binance, BitMEX, DyDX, and Derbit exchanges has plunged, indicating a crowded short position and a bearish market sentiment.