Bitcoin (BTC) fell from the $72,000 level it reached on Wednesday, March 25. It fell to local lows at $65.6K on Friday, March 27, but witnessed a minor price rally over the weekend.
Crypto intelligence platform Santiment noted in a post on X that retail FUD is growing. Social media engagement was trending very downward, and the use of fear words like “rejection” or “crash” was on the rise.
But as their data shows, buying opportunities arose during periods when retail sales were in a bloodbath. These have not seen a sustained uptrend after the higher timeframe trend change in October, but they do indicate a bounce.
Another crypto market intelligence platform, Alphractal, showed that the long/short ratio has increased in recent days. Despite the pullback from $76,000 over the past ten days, increased long positions have shown that investors are willing to take on a high amount of risk to catch the local bottom.
This could be dangerous for short-term bulls. The increased desire to take leveraged long positions means long liquidations are occurring below local lows.
This makes it more attractive for BTC to continue an extended squeeze towards $64K or lower.
Purchasing power set aside, clarity awaited
Crypto analyst GugaOnChain used the falling exchange stablecoin rate to show that there is a high amount of stablecoins on exchanges compared to others. bitcoin reserves.
The recent price drop has caused the currency stablecoin to USD ratio to fall to February lows. The analyst concluded that this shows that BTC is structurally cheap and has enough purchasing power to catch the decline.
As the price of BTC increases, the reserve value of the coin increases, causing the exchange stablecoin rate USD to rise. Stock market net flows are also needed to better understand their impact.
Over the past month, the net flow of foreign exchange remained negative and showed a stable accumulation. This supports the idea that buying pressure is present despite the volatility in the last two weeks.
Another phase of negative net flows could mean investors are buying the dip, a sign of confidence. As global markets shake out, Bitcoin investors may want to wait for more clarity before buying.
Final Summary
- Retail sentiment was extremely bearish but speculative traders were willing to take on extra risk and buy in these conditions.
- Purchasing power relative to the stablecoin reserve ratio was high, but net flows were unstable over the past four days.
