Bitcoin traders are witnessing extreme fear as market sentiment hits bearish levels following the Bybit hack.
Introduction
Bitcoin traders are experiencing a period of extreme fear as market sentiment reaches bearish levels following the Bybit hack and other concerning events. According to Santiment, current Bitcoin sentiment mirrors that seen on February 17 and 18, which preceded price rebounds.
Bitcoin Price Dips as Sentiment Turns Bearish
A significant spike in negative sentiment was caused by Bitcoin's price plummeting to $95.1K. Social media reactions reflect trends observed during past downturns. On February 17, negative sentiment peaked, aligning with a Bitcoin price dip. Shortly after, Bitcoin rebounded, showing a strong correlation between crowd fear and local bottoms. Similarly, February 18 saw another fear wave, followed by price recovery. Now, on February 21, another sharp decline is recorded, and a new wave of negativity has set in, as before past Bitcoin recoveries. The market downturn can be traced back to the Bybit hack triggering massive FUD.
Sentiment Analysis: A Key Indicator for Price Movements
Social sentiment analysis plays a crucial role in predicting Bitcoin price trends. Historically, extreme fear signals a potential bottom, while extreme optimism often precedes corrections. Data from Santiment shows a direct correlation between negative sentiment spikes and Bitcoin price rebounds. Market psychology suggests that Bitcoin often moves opposite to retail traders’ expectations. When fear dominates, major price recoveries have followed. If this pattern continues, the current bearish sentiment could indicate an impending uptrend.
Bitcoin's price remains near $95.9K, with sentiment indicators showing dominant negativity. If market reactions mirror past trends, a price rebound may soon follow. However, traders must remain cautious, as external factors like the Bybit hack could still influence market behavior.
