According to cryptocurrency research firm Santiment, there are at least five keywords that could signal a bottom in the cryptocurrency market. Bitcoin is currently trading at $61,870, down 3% in the past 24 hours, due to rising geopolitical tensions in the Middle East. Cryptocurrency traders are concerned about the impact of escalating conflicts on risk assets.
Brian Quinlavin, chief marketing officer at Santiment, said that when the word “fear” is used a lot on social media, it can help traders determine whether the market is too nervous and ready to rebound.
Quinlavin notes that when the market is down, people tend to use certain words more frequently. These fear-inducing keywords, known as “FUD” (Fear, Uncertainty, Doubt), can be a sign that a recovery is coming.
The first word is “crash”. When this word appears frequently on social media, it can signal that the price has bottomed and is about to recover.
Similarly, when the words “sell” and “dead” are mentioned a lot, this also often indicates that a recovery is coming, creating opportunities for brave investors.
The fourth keyword, “crackdown,” refers to regulatory pressure that could make traders nervous about government action. Quinlavin said that fear could depress prices, but also create attractive buying opportunities.
Finally, the word “liquidation” can have a positive or negative connotation, depending on the direction of the market. It refers to traders being forced to exit their positions due to sudden price movements.
Quinlavin emphasizes that in times of extremes, taking a “contrarian approach” to the crowd’s thinking is often the right decision. “When everyone seems to be on the same page – whether optimistic or pessimistic – that’s when the bigger picture becomes clearer.
