Positive sentiment for Bitcoin has seen a “serious decline,” according to analysts at market intelligence platform Santiment.
On Thursday, as Bitcoin (BTC) struggled to regain its recent bullish trajectory, Santiment noted that funding rates were indicating an increase in bearish bets.
“The positive sentiment towards Bitcoin has declined despite the recovery of the mid-cap crypto market this week. Many traders, especially on Binance, are opening short positions in anticipation of another decline in Bitcoin,” the platform wrote.
Bullish comments on Bitcoin’s price have dropped to about a third of the rate seen four months ago. The data also shows that traders are increasingly betting against Bitcoin’s price rising in the near term.
Bitcoin holders withdraw their cryptocurrencies from exchanges
Bitcoin’s surge to $66,000 earlier this week has seen it drop to around $63,380. The price has fallen more than 2.5% in the past 24 hours, which Bitfinex analysts say is likely to happen as we explained in our previous coverage.
While positive sentiment has waned and traders are increasing their short positions, Santiment notes that these factors “increase the potential for cryptocurrencies to appreciate.”
Cryptocurrency analyst Wu Minqiu noted, mail Last Thursday, Bitcoin holders pulled massive amounts of money from exchanges. This happened on July 5 when Bitcoin fell below $54,000 — a scenario that coincided with massive selling pressure from the German government and initial Bitcoin transfers by the Mt. Gox exchange.
At that time, Bitcoin holders withdrew $3.8 billion worth of bitcoin from exchanges, helping the price rise from around $56,000 to over $65,000.
This week, on July 16, Bitcoin holders again slumped on exchanges, pulling out another $3.4 billion worth of Bitcoin. Short-term traders were caught off guard afterward, though the leading cryptocurrency has fallen again in the past 24 hours amid renewed Mt. Gox-driven sentiment.
While prices are below their highs during the week, this movement of BTC from exchanges indicates that holders plan to hold onto it, which has often had a positive impact on the price.