Markets
3 Signs of Lasting Bearish Sentiment
Digital assets are facing sharp corrections after an attempted rebound, with some users pointing to a long-term bearish sentiment. This year, crypto asset prices have skyrocketed following huge institutional inflows into the market. While this has intensified the bull cycle, certain events have drawn the lines of a creeping bearish sentiment in the market.
The recent market correction triggered massive sell-offs leading to liquidations as traders repositioned their holdings. For mild and sustained bearish sentiments, there are signs to watch. The current sentiment is largely considered short-term as bulls eagerly await higher prices based on historical trajectories.
Bitcoin and other crypto assets are falling, here are the key things to watch for in case of bearish sentiment.
Massive transfers to stock exchanges
A bull cycle Bitcoin price is high because most users are buying assets with limited selling pressure. However, when signs of selling are registered, bearish sentiment develops among traders. Large transfers of assets to centralized exchanges are seen as potential sales, while moving exchanges show signs of long-term holding. Some of the reasons include the ease of selling on exchanges. This year, large amounts of BTC were withdrawn from exchanges during price spikes.
Frequent price correction
Crypto assets are volatile, so some price fluctuations are to be expected. However, when the prices of major assets fall for consistent periods, bearish sentiment can form in the market. This can also happen during persistent downward swings, taking the assets well below their peaks. This happened after the 2021 bull season, when the price of Bitcoin fell from over $62,000 to below $25,000.
Mineral reserves
A look at miners’ reserves can tell if the market is in the grip of bearish sentiment. If Bitcoin miners are selling their reserves, it often means that the market is on a downward slope. This is because during a price correction, BTC Miners Miners tend to sell assets to cover losses from declining market activity. On the other hand, miners will hold on to assets that show positive momentum.
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David is a financial news contributor with 4 years of experience in Blockchain technology and cryptocurrencies. He is interested in emerging technologies and has an eye for breaking news. Staying abreast of trends, David has reported on several niches including regulation, partnerships, crypto assets, stocks, NFTs, and more. Outside of financial markets, David enjoys cycling and horse riding.