There is an interesting pattern, connecting FOMC news with price action.
It's "FOMC" mentions spikes in crypto social media.
Previous FOMC spikes happened right before market volatility increase:
And it often was a reversal. We think the history might repeat itself again.
Very often it's a volatility marker or comes close to a bottom.
So probably we might have something similar today, on coming FOMC news.
You might also want to have a look at 'inflation' or 'CPI' mentions chart:
And if you follow the link there will be more data showing how different channels talk about these topics (hint: Elon Musk knew what he was buying).
«Cash is the king» — this is the narrative we might be looking for at the bottom.
Like a total disbelief in crypto and stocks.
How could we measure it?
This is how it looks like currently:
We can see this narrative is getting stronger.
Perhaps making us closer and closer to the bottom.
Would you like to check how this played out on a previous cycle?
One of our favourite sentiment indicators is "Buy the dip" mentions.
Ideally this sort of calls happens quite often in the beginning of downtrend, slowly fading to market bottom. This could be explained by increasing crowd disbelief. Less confidence, less patience. At the point of maximal disbelief, a reversal might happen.
What are we seeing now?
- Amount of 'Buy the dip' calls is declining:
2. The same time it's dominance is increasing:
So, how could we read it?
- Overall social activity on crypto market is declining quite fast.
- "Buy the dip" callers becoming more and more dominative in dissolving crowd.
The day they are gone could possibly indicate a bottom. Not there yet.