Is The Bitcoin Bottom In? Buy The Dip Sentiment Erodes Amid Drop Toward $60,000

Bitcoin has been sliding down since it reached its all-time high in March. This has largely led to a buy-the-dip sentiment among crypto traders, with many believing the correction would end as soon as it ended and Bitcoin would surge again to new all-time highs. 

According to crypto analytics platform Santiment, the thrill of scooping up ‘cheap’ Bitcoin appears to be fading as the consolidation drags on around the $60,000 price mark. As Santiment noted, this fading buy-the-dip mentality could actually be a signal that Bitcoin is nearing a bottom, according to price history. 

Bitcoin tumbled from $63,000 to $60,000 on Friday, extending its run of range trading in the past few weeks. As noted by Santiment, traders are becoming less enthusiastic about buying the dip according to social media interactions.

While this might be worrying for some investors, Bitcoin’s unique price movement over the years has prompted Santiment to note this is generally a good sign that the bottom is nearing.

To explain this further, the sentiment usually turns quite negative when Bitcoin crashes from all-time highs. But historically, the point at which “buy the dip” talk on social media starts to fade is often a sign the bottom is near than most people will think.

The fading “buy the dip” talk suggests the weak and scared bears have sold and the bulls are starting to position themselves. 

Traders are showing weak #buythedip interest in #Bitcoin‘s latest retrace down to as low as $60.2K today. Generally, the crowd’s lack of faith is a strong sign of prices being close to a #bottom. Track social interest levels to see if #FUD stays high. https://t.co/cZjTWcCnL2 pic.twitter.com/Nj19XkIdgq

— Santiment (@santimentfeed) May 10, 2024

Unfortunately, there’s no way to know for sure if prices have bottomed out until after the fact. However, key support levels on the Bitcoin chart haven’t broken down and fundamentals haven’t changed. If Bitcoin continues to hold above $60,000, this could signal the bottom is in.

At the same time, the bullish Spot Bitcoin ETF narrative driving increasing mainstream adoption is still in place, meaning the crypto could reverse into a full bullish action very soon.

Other key factors also point to Bitcoin nearing its bottom. As noted by crypto analyst Willy Woo, Bitcoin’s risk signal recently printed a lower high, which is a formation that frequently paves the way for a bullish trend.

At the time of writing, Bitcoin is trading at $61,000 and is down by 4.2% in the past seven days. Although Bitcoin might have formed its bottom, this lull action could continue into the next few months until the crunching supply of the halving gets factored into its price. 

Remarkably, some new whale addresses are silently accumulating Bitcoins. On-chain data from Whale Alerts shows the recent movement of 1,999 BTC into new private addresses.

Featured image from Pexels, chart from TradingView