[EN] Sentiment analysis: Week #46
RU Version: week #46
Review created for the project Crypto Shaman.
The analysis is based on fundamentals, blockchain indicators and statistical analysis. There is no technical chart analysis, it is only the “tone” of the crowd. As is known, the crowd is most often gone wrong, the market goes again majority. The task of current reviews is to gather as objective and versatile an assessment of market sentiment as possible.
In this review we gonna consider the following metrics:
- Well-known traders analytics. It is collected 10 cryptocurrency blogs in which each trader gives own opinion. It is not exactly the opinion of the crowd, but the traders are chosen with a wide variety of approaches and different success statistics.
- Paid Telegram channel analytics. It is collected 15 signal (or paid) channels most suitable for sentiment analysis. The authors publish their trades and analytical reviews, on the analysis of which you can understand the author’s mood and those who pay money for his signals.
- Social media sentiment. Analysis of Twitter, Telegram, Reddit, keyword searches on these social networks.
- Financing rate. This metric cannot be faked by the stock exchange, so its values are reliable and statistically pretty good working out.
- MVRV indicator. This onchain indicator tries to calculate the realized profit of large players in relation to total capitalization. It has good performance statistics with certain settings.
- Liquidations. The number of positions liquidated is a good indicator of how much price has chosen the right direction. The market is known to follow the path of least resistance.
- CME GAP. Statistically, 90% of all gaps are closed.
- Fear & Greed Index. The Fear & Greed Index is based on the analysis of social media sentiment.
- Historical volumes. The week before last there was a situation that occurs on average twice a year.
- Weekly poll. Telegram poll of traders ‘where the price will go first’.
On 21.11.2022 bitcoin price is $16,262. Since last revew week #43 bitcoin is down -$4,438 (-21,6%). From week #38 (link — in russian version) up to week #43 it was said that the market would definitely go down. After 4.5 months of a narrow sideways trend, the price finally worked off all those reviews.
Well-known traders analytics
This block contains 10 specialists whose projects have been selected to gather statistics on the general sentiment of traders with trading experience. These projects have existed for four years, have a consistent brand and author’s approach to market analysis. They have a large audience on their blogs.
Each trader has a different approach. Some experts look at bitcoin in terms of fundamentals and blockchain movements, someone analyzes in terms of volumetric analysis, someone work with their own customization/production indicators. The selection is therefore as diverse as possible.
The observations are based on the last week’s posts/reviews, so the data is up-to-date.
If there are no reviews from the blogger in the last week, the latest review is taken because the blogger considers the scenario to be relevant.
- Hamaha (140,000 followers)
Last update from Hamaha about buying the FTX exchange token (10 days ago). Before that there was a bitcoin review a month ago in which the market was expected to be above $26,000.
The author has once again proved that it should be seen as a reverse indicator. There was no more news. According to the rules, the latest current estimate is taken, even if it is an old one.
Conclusion: rise
2. Mr. Mozart (102, 000 followers)
Market expectation — down to $13,800
Conclusion: down
3. Tears of Satoshi (in the original — Слезы Сатоши) (102,000 followers)
The author expects bitcoin to move towards $11,000 — $14,000 as the higher priority scenario. In the event of a rise above $20,000, bitcoin will then take a deeper dive.
Conclusion: down
4. Head of Crypto (in the original — Главный по крипте) (63,000 followers)
This author is one of those who have been buying and taking up bitcoin all along in a bear market, talking about growth. But at the moment the author is wavering, frankly not understanding what is going on. The main expectation is a slight decline.
Conclusion: down
5. MMarketMaker (62,000 followers)
The author is also one of those who, since ATH, has written about the rise in every wave of decline. The reviews are now 50/50, mostly local reviews. The latest local review is in favour of a decline.
Conclusion: down
6. Top Traders (51,000 followers)
In a month and a half of observing the market, the authors have maintained an unchanged mood of growth. The review is now more subdued and the general mood of the review is in favour of a decline.
Conclusion: down
7. Trade by Booba (48,000 followers)
The author is also one of those who, for a month and a half (while watching him), has been talking about rise. He calls the current fall a black swan. But the overall market assessment prioritises a rise to $28,000.
The author is right about one thing. There is far more panic in the market now than there was a month and a half ago, as can be seen from both the estimates above and below.
Conclusion: rise
8. Pimen (17,000 followers)
The expectation from the market is a drop to $11,000 — $13,000.
Conclusion: down
9. Crypto Mentors (18,000 followers)
The author looks at the local picture and on the local picture a decline and a bottom update is expected. A short pull up to $17,000 is possible.
Conclusion: down
10. Dow Jones Crypto (10,000 followers)
The author is holding a long, expecting a short-term rise.
Conclusion: rise
Outcome
- Hamaha — up
- Mr. Mozart — down
- Tears of Satoshi (in the original — Слезы Сатоши) — down
- Head of Crypto (in the original — Главный по крипте) — down
- MMarketMaker — down
- Top Traders — down
- Trade by Booba — up
- Pimen — down
- Crypto Mentors — down
- Dow Jones Crypto — up
In the last week #43, 9/10 analysts looked in favour of growth. The situation has now changed dramatically. 7/10 are looking down, only 3/10 are looking up. Even those who have been writing about the whole bitcoin decline are now shorting or looking at a further dip.
Having made statistics based on 10 traders, 30% of the opinion is in favour of growth (last week it was 95%).
Paid Telegram channel analytics
In order to extend the analytics of the previous block, 15 closed (paid) VIP channels were selected and analyzed, which often go together with the public big analytics channels on Telegram and YouTube.
The purpose of this block is to examine the mood of traders, for which many market participants give up tens of thousands of dollars in total. This list includes both veteran and young channels. A public review is one thing, but how the author in a paid channel trades at a distance is quite another, and assessing the “sentiment cloud” can be very useful.
The main argument for including one channel or another in the list was the more or less adequate presentation of information. In addition to signals, it is very desirable to have at least a short overview of the market. Pampodump channels, which are containing only signals, airdrop, boxes and nft topics were excluded.
The last 7 days of posts are analyzed, focusing on the last 3 days. If the content has not been released for a long time, the most recent sentiment is retained. As this is a signalling group, the actual expectation is no further than 7 days.
The confidentiality of information from these feeds is maintained due to copyright reasons, but the authors’ overall sentiment score will be calculated.
1. BelnCrypto Premium Channel
“Up or down” — the author is undecided.
Conclusion: 50/50
2. Coin coach
Not much information for the week, but all trades are long.
Conclusion: rise
3. MM club
Trades in a week and a half have been both ways, now the mood is short.
Conclusion: down
4. Crypto coin B
On bitcoin and Ethereum expect a recent Low decline.
Conclusion: down
5. DW Trade
Shorting only deals in the last few days.
Conclusion: down
6. Ghost trade
Waiting for the bottom to update.
Conclusion: down
7. Ark (in the original — Ковчег)
The market looks short according to the author.
Conclusion: down
8. Waveform analysis (in the original — Волновой aнализ)
Expectation of growth from both bitcoin and the stock market.
Conclusion: rise
9. P4M
Expectations on bitcoin — rise.
Conclusion: rise
10. Jewtrade
Traded purely alta, no market valuation was done by the author. The trades are 50\50.
Conclusion: 50/50
11. Romanov
Expect to drop to $14,000 and below.
Conclusion: down
12. Trading in crypto TG
On Ethereum a decline is expected.
Conclusion: down
13. Booba Signals (in the original — Booba Сигналы)
Few deals, but all in favour of growth.
Conclusion: rise
14. Aziz analytics (in the original — Азиз аналитика)
The author is more likely to reduce.
Conclusion: down
15. FED RUSSIANS INSIDER
Overview on btc is awful. Mid-term market expectation is down, but the upside is given as 51% vs. 49% downside… Overall — 50/50.
Conclusion: 50/50
Outcome
- BelnCrypto Premium Channel — 50/50
- Coin coach — up
- MM club — down
- Crypto coin B — down
- DW Trade — down
- Ghost trade — down
- Ark (in the original — Ковчег) — down
- Waveform analysis (in the original — Волновой aнализ) — up
- P4M — up
- Jewtrade — 50/50
- Romanov — down
- Trading in crypto TG — down
- Booba Signals (in the original — Booba Сигналы) — up
- Aziz analytics (in the original — Азиз аналитика) — down
- FED RUSSIANS INSIDER — 50\50
The situation has changed dramatically since last week #43. Last time, the views were split along the channels as follows: 10 — up, 3 — undecided, 2 — down. Now the opinions are divided as follows: 4 — up, 3 — uncertain, 8 — down.
Overall growth sentiment: 26% in favor of rise, 53% in favor of down (last time 76% up, 13% down).
Social media sentiment
Next, social media activity related to bitcoin and the crypto market will be examined.
Telegram
Activity on Telegram rose slightly on the downward wave but then dropped dramatically, almost 3 times.
Looking at the older TF, we can see that activity in Telegram is historically low. It is fair to say that crypto in Telegram is dying.
Twitter activity has not declined. The current decrease in the graph is the data for the new day, which has just begun (at the time of writing a review).
Keywords
Keyword searches analyse social media: Telegram, Twitter, Reddit. The pattern of reactions is different for each chart, but in the medium term these keywords may show either the culmination of a trend movement or a forthcoming future movement.
It is necessary to understand that the market moves against the crowd. When a surge of buy interest is seen, we should expect a decline, while if a sell interest is seen, we should expect a rise.
“Buy” & “dip” keywords
Logic: After a spike above a certain value, there should be a decline soon. Detailed description in week #39 (link — in russian version).
Activity during the decline was in peak condition. In previous spikes like this, the price would go sideways for a while.
“bear” keyword
Logic: During a spike, the decline should stop, the indicator is a “stop” indicator for the decline. Detailed description in week #39 (link — in russian version).
There was a small spike during the decline wave. But still less than when bitcoin fell from $30,000 to $17,000.
“short” keyword
Logic: The surge precedes the rise or during the peak of the fall. Detailed description in week #39 (link — in russian version).
There has been a serious spike.
Conclusion
There is a surge in those who are shorting. This is a sign of a stop. Such a surge usually leads to a stop on the middle timeframes. It is very likely that there will be a sideways move.
Financing rate
This indicator comes from the futures markets. In simple terms, if there are too many long positions in the market (the market is most likely rising), then every 8 hours a certain percentage is taken from the total margin of each long position in the futures markets and allocated among the short positions. And vice versa. The size of these same percentages is shown on the funding rate chart. You can read more about the financing rate here (link — in english version).
How to use it?
A financing rate that is too high leads to a very rapid decline. Too low a funding rate leads to either a rise or a halt to a fall. All trend movements up or down are accompanied by a calm funding rate, it means that crowd does not favor the direction of the current movement. As soon as there is a spike, the price soon goes in the opposite direction.
A detailed statistical analysis of the metric is given in week #39 (link — in russian version).
Binance
During the fall there was a very large spike in the funding rate in favour of the shorts. This is most likely why the price stopped its fall. At the moment the funding rate is positive and there is no panic.
Bitmex
During the fall there was also a very large spike in the funding rate in favour of shorts. But now the funding rate is normal and there is no shorting sentiment.
Conclusion
In terms of funding rate analysis, oversold is not there right now. It was there that week and it was clearly visible how the price got a pullback after a surge of short sentiment.
MVRV Indicator
Market Cap versus Realized Cap (MVRV) is a popular on-chain indicator that helps identify bitcoin price lows and highs. The MVRV indicator is designed to analyze long-term trends and cycles. It is used as a tool to detect two major market phases — accumulation and distribution.
MVRV is based on the idea of two types of market participants struggling — speculators and hodlers. In the context of the indicator, hodlers are investors who have given up short-term financial gains in favour of a long-term view. Speculators are traders aiming for short-term profits. The indicator helps determine which players dominate the market at a particular point in time.
Read more about this indicator here (link — in russian version).
Generally, the higher the MVRV ratio, the greater the unclaimed profits and in turn, the higher the risk that BTC holders will start selling and reducing their exposure. If the MVRV ratio is low, this could be a good time to accumulate positions.
This indicator cannot be considered very precise, as its figures can easily be distorted. The main problem with the indicator is that when you transfer for example 100,000 btc, the indicator may consider it as a buy or sell, when in fact it was a transfer from one wallet to another by one owner.
30 days ratio
See week #39 (link — in russian version) for details.
The indicator had already entered a highly oversold area. Usually the price would get a stop or a bounce from the highlighted marks.
Conclusion
According to the indicator, at the very least, price should go sideways.
Liquidations
There were a lot of longs liquidated on the downside, but we have to take into account that the 4.5 month low was taken, behind which there should be a lot of liquidity. And yet despite the renewed Low, despite the big bearish bar on the weekly TF, there were more sideways shorts liquidated.
This shows that in spite of the shorting sentiment all these months, the bottom line shows that there was more shorting than longing.
GAP on CME
This gap is the gap between Friday’s closing price and Monday’s opening on bitcoin. There is no technical explanation for this phenomenon, as this is not a traditional stock market and the main volumes traded are not on the Chicago Mercantile Exchange.
Still, mathematical statistics suggest that 90% of all these gaps overlap sooner or later, usually within the next week.
The current GAP is at ~$16,500, 6% below the current price.
Fear & Greed Index
The Fear and Greed Index shows the mood of market players by analyzing social media for keywords. The peak values of this indicator, according to the authors’ claims, signal an overbought or oversold bitcoin.
By studying the indicator we can conclude that the historical values of the market “bottom” fall within the value of 10, or that a serious bounce has been formed from this value.
Read more here (link — in russian version).
Indicator value: 31
The indicator shows a balanced position.
Historical volumes
This is not exactly a sentiment, but still a historical event, I can’t help paying attention to it. It is based on a logarithmic chart, and volumes with a 500k btc bar.
This volume has been exceeded only a few times in the last 5 years and each time the price was either an extremum of a trend movement or a stop and go sideways. The volume of the week before last is just one of those cases, which occur 1.8 times a year on average.
What does this tell us? After a prolonged decline ending in June, the first surge appeared, after which the price went sideways for 4.5 months. Then not much of a Low update at all (-10% of the June Low) forms a second historical volume spike.
It looks like the price is close to another extreme. That does not mean that bitcoin has hit a final bottom, no. But based on this chart, a local and quite serious pullback after a prolonged bear market is coming.
Weekly poll
On 5th November, before the bottom update, although I didn’t do a sentiment review, I did a poll. The results were 50/50, which was good for the fall.
This week’s poll results. Tilt towards renewed lows and moves lower.
Last week’s polls on the general mood of the market:
The $12,000 zone is highlighted by many cryptans, both in technical reviews and VIP channels. This is also evident in the survey below:
All sentiment review surveys:
As a result, even locally, there is a serious tilt in favour of further declines. There is also a pronounced mass expectation of the $12,000 mark.
Grand total
In the last survey, 9/10 traders were looking in favour of growth. Now only 3/10 traders are looking up (30% up vs 70% down). In VIP channels, only 26% for growth, 53% for decline (last time it was 76% for growth).
There has been a huge surge of willing sellers, according to Twitter’s measurements.
The Fear&Greed indicator continues to stay in a balanced position.
MVRV gives the first signs of local oversold.
Interesting situation on the liquidation chart. Despite exiting the sidewall and updating the 4.5 month sidewall, the price received liquidations in less than 1.5 months of accumulation and growth inside the sidewall. As a result, there are more shorts in both directions.
Conclusions and author’s view
My reviews were hardly the only ones in the whole crypto CIS space on Telegram writing about the recent collapse. And as part of that fall, I really thought we would go to $15,000, $12,000 and maybe even $9,000 on impulse. But the FUD in the market keeps going up and the price stubbornly refuses to go down… Which made me wonder about the right medium-term view now.
Compared to week #43’s overall total, the situation is radically different. Most analysts and paid Telegram groups are now looking in favour of a decline. Yes, the greed for a decline is not comparable to the greed for a rise 3 weeks ago. But still, the expectation of a decline is now seriously pronounced.
A few more words about the nature of the sentiment after the fall. After the drop from $30,000 to $17,000, most analysts called it a false takeover, a shakeout and expected a serious rise soon. Now the analysts are not even close to saying that.
There is indeed a strong desire to sell on social media. A lot of FUDs are being dispersed. There has been negativity about Crypto.com, Gate.io in these two weeks. Liquit has stopped trading and blocked withdrawals. There have been rumours of problems with Grayscale. With all that said, the market is feeling the effects of the FTX collapse. What is surprising is that despite the huge amount of FUD, the market is not going down, the sideways trend has been going on for a two weeks already. Actually, this is what made me look at the market in a different way, even before I started studying the current sentiment. In simple words: there is a lot of FUD pouring in the last two weeks, there is no result, the price does not update its minimum.
The historical volume situation is on the side of bitcoin being close to an extremum, or at least going back into a prolonged sideways slide.
The situation with liquidations is also thought-provoking. In the end, it turned out that with minimal upward movement, more shorts were liquidated than longs after the market collapse.
GAP on CME as the cherry on the cake in favour of local growth and continuation of the sidewall.
So what ultimately I think about the future of the crypto market now? There are many arguments in favour of at least stopping the move. The price, in general, may renew its recent Low, but not by much at all.
The most likely scenario is a sideways move for a few weeks with a possible Low, but not for long. The main priority for the direction of movement is upwards.
The optimistic scenario is a quick return to $20,000, in which case the price will move towards the upper limit of the 4.5 month sidewall, i.e. $25,000. And then the gap will be closed in the area of $25,000–30,000. An increase up to $30,000 could be incredibly impulsive, in just a few weeks.
An unlikely scenario is a move towards $12,000. That’s where many cryptans, according to polls, are waiting for bitcoin to buy in. Will MM allow it to get there? Based on current observations, not yet.
If you are interested in the author’s other researches, as well as current thoughts on the crypto market, follow Crypto Shaman in Telegram.