There are at least five keywords that could signal a crypto market bottom, according to crypto research firm Santiment.
The price of Bitcoin (BTC) has slipped 3% in the last 24 hours following heightened geopolitical tensions in the Middle East. Crypto traders are increasingly concerned with what escalating conflict would mean for risk assets.
In an Oct. 2 blog post, Saniment director of marketing Brian Quinlavin says when five main “fear” words are used frequently on social media, it can help traders identify if the market is overly fearful and potentially primed for a breakout.
Words that signal the bottom
“When the market is feeling down, people often start using specific words more frequently. These fearful keywords, often referred to as “FUD” (Fear, Uncertainty, Doubt) words, can actually signal that things are about to turn positive,” said Quinlavin.
The first word is “crash.” When everyone is talking about a crash, it usually means prices have plummeted, and traders have gone into panic mode. Ironically, when the word “crash” is mentioned the most on social media, it’s typically when prices begin to revert.
Use of the word “crash” on social media mapped against the price of Bitcoin. Source: Santiment
The same is true when the words “sell” and “dead” appear on social platforms. Much like “crash” when traders begin invoking the words “sell” and “dead” the most, it usually means that a recovery is around the corner, creating “opportunities for the brave,” says Quinlavin.
The fourth fear keyword is “crackdown,” referring to regulatory and legal pressures that make traders feel restricted and fearful of government actions or the potential outcome of a new or ongoing lawsuit.
“This fear can push prices down but it often brings good buying opportunities, especially when the panic seems overblown,” says Quinlavin.
Related: XRP price breaks 3.5-year downtrend as analyst predicts $200
The fifth fear word is “liquidation” which can be a double-edged sword depending on the direction of the market. Liquidations refer to traders being forced out of their…
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