- Data showed that Bitcoin might fall below $66,000 despite rising bullish sentiment.
- A report explained how Bitcoin might hit new peaks faster than previous halvings.
Instead of panicking after Bitcoin’s [BTC] price collapsed, market participants are confident that the coin might recover. AMBCrypto got this information after reviewing the social volume using Santiment.
According to our analysis, there has been a surge in the use of words like “bullish” and “buying.” Likewise, statements that include “selling” and “bearish” also increased.
Scared money to make more?
However, we observed that the bullish side was almost double the size of those in fear. Typically, you would expect this sentiment to fuel a quick bounce for Bitcoin. But history says otherwise.
Yes, buying opportunities appear when prices crash, as they did in the last 24 hours. However, a further crash might still happen if conviction is as high as it was at press time.
Source: Santiment
Historically, if fear outweighs bullish conviction, and the retail cohort is panic selling, that could be the best time to buy the dip. As of this writing, that has not happened.
Hence, it is likely to see BTC drop below $66,400 in the near term. Hours before the piece, AMBCrypto reported how Bitcoin could experience high volatility as the halving approaches.
“This cycle may be faster”
Interestingly, crypto asset management firm Grayscale also released its thesis about the event and the possible impact on price.
The report, dated the 1st of April, focused on Bitcoin’s performance in March and its possible recovery after the halving. Grayscale also mentioned certain factors that could influence BTC later this year.
According to the report, Bitcoin outperformed many other assets last month because many central banks worldwide displayed signs of reducing interest rates.
Therefore, demand for alternative stores of value like Bitcoin jumped. Concerning the upcoming halving, the firm noted that it expected prices to drop.
Source: Grayscale Investment
However, recovery could be faster than it was during the previous halvings. The thesis read,
“By comparison, the recovery from the prior two drawdowns took approximately three years, while the recovery from the first major drawdown took about one and a half years. In Grayscale Research’s view, we are now in the “middle innings” of another Bitcoin bull market.”
Bitcoin has others to look up to
Meanwhile, AMBCrypto checked the overall perception of the coin in the market. On the 1st of April, the Weighted Sentiment dropped to -0.937, suggesting that most participants were bearish.
But at press time, the metric seemed to be heading back to positive territory. If the reading becomes positive, it would reinforce participants’ confidence initially mentioned.
Source: Santiment
Moving on, Grayscale mentioned that Bitcoin ETFs are likely to remain a driver of the price. Therefore, if inflows increase, BTC might climb.
However, an increase in outflows, as we discussed in recent times, could cause Bitcoin to stall or decline further.
Beyond that, the firm noted that the Federal Reserve’s decision to reduce interest rates might help BTC appreciate.
For the long-term horizon, it also noted that the November 2024 U.S. elections could influence the coin’s direction.
Read Bitcoin’s [BTC] Price Prediction 2024-2025
During the last elections in 2020, Bitcoin went from less than $13,000 and got close to hitting $20,000 within a month.
Will the scenario be similar this time? Time will tell. But for now, the coin’s decline might extend a little longer.
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