According to analysts at market intelligence platform Santiment, Bitcoin’s positive sentiment has taken a “significant hit.”
On Thursday, as Bitcoin (BTC) struggled to regain its recent uptrend, Santiment shared that funding rates were signaling a surge in bearish bets.
“Positive commentary on Bitcoin has come despite the medium-term crypto market rally this week. Many traders, especially on Binance, are initiating short positions in anticipation of a BTC rally,” the platform wrote.
Bullish commentary on Bitcoin’s price has fallen to about a third of what it was four months ago. The data also shows that traders are increasingly betting on BTC to rise in the short term.
Bitcoin holders withdraw BTC from exchanges
Bitcoin surged to $66,000 earlier this week, but has since fallen to $63,380. The price has fallen more than 2.5% in the past 24 hours, which is especially likely to happen, as Bitfinex analysts have highlighted in our previous report.
With positive sentiment waning and traders increasing their short positions, Santiment suggests these factors “increase the likelihood of a cryptocurrency rally.”
Crypto analyst Woo Min-kyu noted in a post on X on Thursday that Bitcoin holders have been withdrawing huge amounts of money from exchanges recently. This happened on July 5th when BTC crashed below $54,000. This was a scenario that coincided with the massive selling pressure from the German government and the initial BTC transfers from Mt. Gox.
At the time, holders withdrew $3.8 billion worth of BTC from exchanges, causing the price to jump from around $56,000 to over $65,000.
On July 16th this week, Bitcoin holders again rushed to exchanges to withdraw $3.4 billion worth of BTC. Short positions were not prepared for this, but the flagship cryptocurrency has fallen again in the past 24 hours, fueled by new sentiment from Mt. Gox.
Although the price is below its weekly high, BTC movement on exchanges suggests that holders are planning to buy, which often has a positive effect on the price.