A Santiment report released on January 9 shows that the cryptomarket is experiencing mixed emotions. Digital assets show varying levels of optimism and skepticism.
This analysis highlights the stark differences between trader sentiment and leading crypto currencies, and encourages investors to use contrarian strategies in order to manage these volatile markets.
Mixed Sentiment
Bitcoin (BTC), currently the leader of the market, trades for $93,775 and has a sentiment score of neutral 3 out 5. BTC is consolidating after a recent price pullback. Traders are waiting for an important move in the market. According to the report, traders should hold their positions until further notice as price movements are often preceded by periods of stability.
Ethereum (ETH), which is rated 2 out 5 due to its low price, hovers precariously near the $3,000 level of support, faces a more negative sentiment. Report warned that breaching this level could lead to panic sales, which would create potential opportunities for investors who are willing to adopt a contrary stance.
BNB has a neutral feeling of 3. Traders are watching for new signs of momentum after its recent dip under $700. BNB has a history of decoupling from market trends, which could lead to a break-out move.
XRP, on the other hand has maintained a semibullish sentiment of 4, after a good performance in late 2018. Although optimism was high, it warned that chasing gains with XRP could lead to a correction.
Solana’s (SOL), which scored 4 despite its recent price drop of 8%, has attracted a semi-bullish mood. SANInsights notes that retail optimism is still unusually high. Traders should therefore wait for the sentiment to continue cooling before re-entering markets.
Dogecoin’s (DOGE), on the other hand, has a sentiment score of 1 and its price fell 28% in the last month. The report flags DOGE as a potential contrarian opportunity, noting that extreme bearish sentiment has often preceded recoveries in the memecoin’s history.
Contrarian strategy
In the report, it was stressed that contrarian strategies are important. It cited historical trends in which market sentiment served as a counterindicator to price movement.
The report highlighted that contrarian strategies — buying during fear and selling during euphoria — remain effective tools for navigating the volatile crypto market.
Investors who are willing to accept calculated risk can earn a large return on assets like Ethereum and Dogecoin.
XRP, and Solana, are both experiencing high levels of optimism. This is a sign that you should proceed with caution. Assets in this phase often have to face corrections pressures, before they can resume growth.
Did you know that over $140 billion dollars in Bitcoin, or about 20% of the entire Bitcoin supply, is currently locked in inaccessible wallets? Or maybe you have lost access to your Bitcoin wallet? Don’t let those funds remain out of reach! AI Seed Phrase Finder is here to help you regain access effortlessly. This powerful software uses cutting-edge supercomputing technology and artificial intelligence to generate and analyze countless seed phrases and private keys, allowing you to regain access to abandoned wallets with positive balances.
