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- Bitcoin has recovered to US$63,733 after the crash to US$54,000 marking an 18.5% gain.
- Despite positive market indices, social commentary on Bitcoin has fallen, and short positions have increased.
- Retail interest in Bitcoin remains low, potentially impacted by the popularity of Spot Bitcoin ETFs and meme investments.
The crypto Fear & Greed Index has returned to neutral after spending the beginning of July in fear terrain. This comes as Bitcoin marched through a low, bottoming out at around US$54K (AU$80.6K) on July 5. The number one crypto has since gained 18.5% in the past fortnight. Currently BTC trades for US$63,733 (AU$95,170).
With that strong performance in mind, several factors stand out to keen observers.
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As market intelligence platform Santiment points out social sentiment may not be all on board yet with renewed market confidence – despite a positive Fear & Greed Index. The analysts said, “positive commentary toward Bitcoin has plummeted”, even in light of the recent price recovery.
Additionally, they point to an increase in newly opened short positions – indicating traders are positioning themselves for a potential drop in BTC value. But this is not necessarily a bad thing, according to Santiment “both of these factors increase the likelihood of cryptocurrency rising”.
Data from CoinGlass shows that in the past 24 hours, 48,563 traders with a total value of US$140,3M (AU$209.4M) have been liquidated. Unsurprisingly BTC and ETH had the largest liquidations.
Retail Demand Low, ETFs to Blame?
CryptoQuant’s Ki Young Ju reported meanwhile that the interest of retail investors is still not back. In fact, according to their data it’s at a 3-year low. The founder and CEO of the analytics platform said the trend is “measured by the 30-day change in total transfer volume for transactions under $10K”.
Some in the Crypto Twitter community blame the Spot Bitcoin ETFs for the drop in interest, suggesting that many retail investors now simply buy through these funds.
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Others point to a more profound lack of interest in BTC and instead an appetite to put money into memes – which are of course high risk, but arguably have potential for faster gains.
Retail buys memes and is getting rugged with most 😅😅
— ʞɐʎssǝlʍɐ˥.bitcoin (@lawlessyak) July 18, 2024
So, what’s in store in the medium-term for BTC? According to analyst RektCapital, we may be in for a hot few months, but are not there just yet – pencil September in for a potential trend to the upside, he says.