Bitcoin [BTC] Might Not Have Reached Its Bottom Yet, but the Market FUD Suggests It's Time to Buy

Bitcoin [BTC] might not have reached its bottom yet, according to a recent analysis by AMBCrypto. This seemed to hold true at press time too

Bitcoin [BTC] might not yet have reached its price bottom, a recent analysis by AMBCrypto suggested. This seemed to hold true at press time as well, with the 24-hour long/short ratio flashing a reading of 0.91.

Of the takers (market orders), shorts comprised 52.35% of the volume – Indicating a bearish sentiment.

In a Santiment Insights post, user Brian went on to highlight that negative, bearish social media engagement might be the best time to buy more crypto.

Do markets move opposite to what the majority expects, and where next for the market?

Bitcoin holders and buyers told to ‘panic bid’

Social volume data from November showed that spikes in engagement related to selling in the crypto-verse were followed by price pivots to the upside.

On 12 and 13 November, higher calls for selling emerged as Bitcoin’s price approached the $90k-mark. However, the king coin went on to swiftly scale towards $100k.

Another instance was the short-term consolidation around $95k in the first week of December. Rising bearish engagement was accompanied by a price move to $102k two days later, and the subsequent correction saw bull flags.

The most recent significant spike in bearish social volume was seen on 3 February. This was followed by a quick bounce from $92k to $102k. However, since then, the short-term trend has been bearish.

A recovery following bearish engagement has not occurred over the past week. BTC’s Coin Days Destroyed (CDD) metric showed that a large volume of Bitcoin was moved by long-term holders on 3-5 February, likely for selling purposes.

This spike saw the metric’s moving average tick up. Overall, however, the moving average has registered a declining CDD since mid-November. Demand growth has also fallen over the past two months. Together, the CDD and demand growth highlighted an increasing tendency to sell/book profits in recent weeks.

During this time, BTC’s range has been evident. Investors might begin to wonder if this resembles a distribution phase more than a consolidation before the next leg higher.

Another factor that has aggravated the bearish sentiment is the poor performance of the market’s altcoins. This was highlighted by Bitcoin’s rising dominance as a portion of the total crypto market capitalization.

Is your portfolio in the green? BTC’s Profit Calculator will unveil surprising gains

Putting two and two together, while market FUD suggested that investors should buy more crypto, the BTC.D chart signaled that buying BTC might be the less risky play. Altcoins are set to perform poorly overall, although individual coins might shine.