Will the Crowd Speed Toward Greed, or Hurry Toward Worry?

We have seen many times before how the crowd can get very polarized when Bitcoin and Ethereum go an extended period of time in a tight price range. In crypto markets, bull and bear runs are often extremely designed to catch traders off guard, are short-lived, and have dramatic moves associated with them.

The same is true now as when the first Bitcoin is mined 15 years ago. The only difference now is that there are thousands of other assets to grab a traders' attention when they become restless over the lack of BTC price excitement.

Even though Bitcoin has dropped down to $29.2k to start the week, it is still trading within its long-standing price window of $28.0k to $31.8k, a surprisingly narrow market price floor and ceiling for an asset that spent no more than 2 months trading within a 5% band, throughout 2020-2022.

Besides being a time for picking the "right" altcoins, as they ebb and flow wildly against one another right now, this is a time where professional traders make their most money. Sentiment plays a big factor when Bitcoin becomes flat. And Santiment's metrics are a great way to foreshadow which direction the next big move will be.

The amount of bullish calls appears to be exceeding the bearish calls at this time. This is not the greatest sign for a turnaround, as traders don't appear to be worried after BTC failed to stay above the $30k psychological support level.

In the chart above, look for the red bars to increase compared to the blue bar, indicating bearish sentiment and more traders calling for price tops and mentioning "selling".

On a better note, the percentage of trader discussions related to Bitcoin (compared to top 100 altcoins) is still hanging on in a region that we consider to be a "healthy" area on our chart. Not by a lot, but you can see that BTC social dominance is still 2.42% above the healthy zone of discussion rate.

When traders are talking about Bitcoin at a very low rate, this is generally because traders are having an excessively high focus on altcoins and assets that are designed for short-term gains (rather than long-term sustainability for the crypto sector). On the other hand, we generally can perceive a high percentage of BTC discussion to reflect a healthy enough focus for the crypto sector to rise. And it also reflects a bit of fear (which is a good thing), due to limited interest in more speculative assets.

As of now, there does appear to be a lull in trader activity. Fear of making the wrong decision is one thing, but there is an almost eerie indifference washing over the crypto discussion forums as of now.

As always, though, this will not last forever. And once traders start leaning overly bullish or overly bearish, get ready for the opposite outcome (contrary to the crowd's expectation) to come to fruition.

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Disclaimer: The opinions expressed in the post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.