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Bitcoin & Crypto Market Crash! | Sentiment Analysis

17 May, 2021 Martin Petkov
crypto market crashing

Hello and welcome, everyone. It's Martin here at CryptoGains. Happy Monday! And today, we'll be taking a look at the social sentiment behind Bitcoin and the recent correction. But before that, let's start with some of the recent events. Of course, Elon Musk and his hints that Tesla may be offloading some of his Bitcoin holdings are what is driving the volatility in the crypto market and the deep correction that we witnessed in Bitcoin.

In addition to that, Bitcoin market dominance fell to a three-year low of 40%, and this is beginning to look quite similar to the patterns that we observed in the summer of 2017/beginning of 2018 when we saw the big drop, big correction in Bitcoin. But let's go beyond these initial headlines and see what the data from Santiment suggests.

Beginning with the Bitcoin Weighted Social Sentiment, it appears that, at the moment, we're at a fairly neutral level, which may be interpreted as suggesting that currently there is no hype, that the price is quite sustainable. However, this report was produced at the end of the previous week, so currently, this would have dived even lower. And, actually, whenever we have negative social sentiment, that tends to indicate a good buying opportunity, but that's something for you to decide.

What is also interesting to observe is in the Network Realised Profit/Loss Ratio that some of the whales are actually beginning to take profits, which can be a bit more warning as a sign. In addition to that, the perpetual contract funding rate indicates that currently, there is no bullish bias in Bitcoin as the funding rate is fairly close to the level of zero, so there is no dominance from bulls over bears.

And, finally, what we're also witnessing is a general decline in the social volume of all major cryptocurrencies, which the members at Santiment suggest was something that was observed near the top at the beginning of 2018. So, there could be more trouble for cryptocurrencies in the short term.

Let's take a look at the technical charts and see how you can trade some of these insights. To me, the pivot point for Bitcoin is $45,300. Above that level, the targets on the long side are $46,500 and $47,800. Conversely, below $45,300, selling Bitcoin, with targets at $44,000 and $42,500. What is worth noting, however, is that on the weekly chart, we saw a bearish crossover of the MACD lines, which we haven't seen since late 2020, and this usually is a good indicator that more downside, a deeper correction may be following. Just something for you to be aware of. 

Now let's move to Ethereum. For Ethereum, the critical level that I'm looking for is $3,500. Above that level, opportunities to buy Ethereum, with targets at $3,645 and $3,750. Conversely, on the short side, the reasonable targets are $3,380 and $3,220.

Now we're moving to Cardano. For Cardano, I'm looking for prices above $2.19 to initiate long positions, with targets at $2.32 and $2.425, which is near the all-time high that Cardano registered. However, compared to the other altcoins and Bitcoin, it is holding up quite nicely, near its all-time levels. However, below $2.19, we could see defiance taking us down on the short side to $2.14 and $2.03, which are the nearest support areas.

Now let's take a look at Litecoin. Litecoin also created some of its gains after reaching very high levels and currently trades around $289, which to me is the critical level, the pivot point. Above that level, I'll be looking to buy Litecoin, with targets at $297 and $320 on the long side. Conversely, below $289, the downside is likely to prevail, taking us on the short side to levels as low as $280 and $268.

And, finally, let's take a look at Solana. Solana is trading near all-time-high territory. And because it's difficult to get price targets, considering the recent moves, it's more reasonable to use Fibonacci retracement to get this target. So, the pivot point sits around $50.15. And above that level, we could buy Solana, with targets at $52.40 and $55.25, which are the 1 and 1.272 Fibonacci extension levels. Conversely, on the short side, we can see that the target for taking profit if you initiate short positions below $50.15 are $48.40 and $46.00.

These are the ideas for today. Thanks for joining me. Keep learning with the video education section and the CryptoGains Market Insights subsection. Remember to join the Crypto Signals Made Easy channel for loads of insightful articles, market overviews, and things to inspire you to do your own analysis in trading. Take care and trade wisely.


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