The wild swings of Bitcoin [BTC] have typically presented buying opportunities for market entrants. The world’s flagship cryptocurrency was trading below $35k and its latest price trend has been quite unsettling for the market players.
It is important to note that, Bitcoin’s aggressive dive from its all-time high above $60K has prompted many beginners to ‘buy the dip’. But this strategy has been overused. In fact, according to the latest reports, ‘buy the dip’ is slowly fading away as traders actually buying the dip has decreased considerably over the past few weeks. This was accompanied by a dip in social volume towards the crypto-asset. On the other hand, FUD has intensified on the social networking platform, Twitter. This trend could potentially mean a positive reversal for Bitcoin. This was observed by the crypto intelligence platform, Santiment’s latest tweet which read,
“The amount of #Bitcoin traders who are continuing to #buythedip continues to show decline as social volume toward $BTC is low and #FUD posts on #Twitter are high. Typically, this doubt and disinterest is a positive sign of an upcoming turnaround.”
Bitcoin’s bearish price action to end?
Currently, the cryptocurrency market is hovering in a correction stage where selling resumes near resistances and buying spree heats up near the support areas. To top that, the Fear and Greed index demonstrated that fear was the prevalent sentiment at the moment as BTC traders continued to anticipate for the asset to become affordable, in order to buy the dip.
As depicted by the converging Bollinger Bands, the fading volatility could be an indication that the crypto-asset might be stepping on a period of long-term consolidation. But the upcoming Grayscale unlockings and blockchain data all signal a fresh buying sentiment by high-profile investors meaning, the move could likely point towards bullish.
Bollinger’s bandwidth has declined to 0.15. The last time, the number was around this level was more than two months back. In addition to that, when the bandwidth was around 0.15, back in December last year and April 2021, Bitcoin surged to unprecedented levels. A similar reading in the current scenario could mean a much anticipated bullish reversal.