Data shows bullish sentiment around Bitcoin Cash has exploded on social media, potentially explaining the coin’s pullback from its 17-month high.
The metric separates posts/threads/messages into bullish or bearish by putting them through a machine-learning model. Once they have been divided, it counts up the number of each and calculates their ratio to find the net sentiment on social media.
Now, here is the chart shared by Santiment that shows the trend in the Positive/Negative Sentiment for Bitcoin Cash over the past month:
As displayed in the above graph, the Bitcoin Cash Positive/Negative Sentiment fell to a low of 0.13 earlier in the month. Such a value corresponds to there being just 0.13 bullish comments for every bearish post. Thus, it would appear that social media traders were heavily leaning toward a negative outcome for BCH. Interestingly, what followed the market disbelief was a surge in the coin’s price to the $650 level for the first time since April 2024, around 17 months ago.
This pattern is something that has actually been seen many times throughout the past. “Historically, prices move the opposite of the crowd’s expectations,” notes the analytics firm. This means that an excess of bearish sentiment tends to be a buy signal for the cryptocurrency, while overexcitement can lead to a top.
While BCH initially observed the former type of effect, market balance quickly shifted, and it’s now facing the latter part of the pattern. From the chart, it’s visible that the sharp rally in the coin brought with it a huge spike in the Positive/Negative Sentiment to the 2.3 level.
Bitcoin Cash has witnessed its price drop by around 6.7% since this dominance in bullish sentiment has emerged. It now remains to be seen how the market will react to the pullback and whether another shift in the Positive/Negative Sentiment would follow. Naturally, a pivot back to the bearish zone could help stabilize the price decline.
With this inflow spree, investors have deposited $1.33 billion in the stablecoin to exchanges, the highest level in more than four years. “Massive stablecoin deposits like this often precede major market moves,” explains the analyst.
At the time of writing, Bitcoin Cash is floating around $605, up more than 2.5% over the last seven days.
