A recent analysis by AMBCrypto of Santiment’s data showed that bearish sentiment in the crypto sector is increasing. Bitcoin and Ethereum are experiencing a decrease in profitable and short-term holders, leading to a lack of faith in the market.
According to the data, there has been a sharp drop in bullish sentiment across various online forums. Traders are losing confidence in the market, with bullish calls decreasing significantly. Interestingly, bearish calls have also decreased, but at a slower pace.
This shift in sentiment could lead fearful investors who were once bullish to sell their holdings, causing prices of Bitcoin and Ethereum to drop in the short term. This selling pressure may trigger a domino effect as more investors panic-sell, further driving down prices.
However, the decline in bullish calls could also signal a capitulation event, where investors have run out of hope and are forced to sell. This selling pressure may eventually subside, leading to a period of consolidation and potentially marking a market bottom for BTC and ETH.
The MVRV ratio for BTC has significantly declined, indicating a decrease in profitability for most holders along with the price drop. Additionally, the Long/Short difference for BTC has also fallen, suggesting a decrease in long-term holders compared to short-term holders flooding the market.
Short-term holders are unpredictable and vulnerable to market fluctuations. If volatility persists, it could lead to further downward pressure on BTC in the long run. Similarly, ETH could also face significant selling pressure due to its high correlation with Bitcoin.
In terms of price, ETH was trading at $3,432.61, with a 1.37% increase in the last 24 hours. The MVRV ratio and Long/Short difference for ETH have also declined, indicating a decrease in profitable addresses and short-term holders.
Overall, the bearish sentiment in the crypto sector is on the rise, leading to a lack of confidence in the market and potential downward pressure on Bitcoin and Ethereum in the short term.