[EN] Sentiment analysis: Week #41
RU Version: week #41.
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.
- Fear & Greed Index. The Fear & Greed Index is based on the analysis of social media sentiment.
- Weekly poll. Telegram poll of traders ‘where the price will go first’.
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.
1. Hamaha (140,000 followers)
Nothing has changed since week #39 (2 weeks ago/link — in russian version), trader looking to rise to $30,000.
2. Mr. Mozart (102,000 followers)
The author’s opinion has not changed during the week. A consolidation under $18,500 is a sure short. A long above $23,000-$24,000. As long as the price moves in the area of $18,500-$23,000, the author perceives the movement as a sideways move. Conclusion — 50\50.
3. Tears of Satoshi (in the original — Слезы Сатоши) (102,000 followers)
The author’s opinion has not changed during the week. Raphael invited the owner of another Telegram channel to visit and then together they discussed the market.
Guest quote: “The Hamster (Хомяк) got smarter. Bank of Amerika did a survey showing that 40% of Americans (under the age of 42) either own bitcoin or have some sort of crypto.”
Raphael goes on to say that $19,000 is $6,000 in 2018.
4. Head of Crypto (in the original — Главный по крипте) (63,000 followers)
The author’s opinion has not changed during the week. The author believes that the exit from the four-month accumulation will be up.
5. MMarketMaker (62,000 followers)
The author’s opinion has not changed during the week. The author continues to insist that bitcoin will only rise in the medium term. Some alta is longing.
6. Top Traders (51,000 followers)
The author is optimistic about the market, stating a breakdown of the downtrend. The weekly review did not come out, so I conclude that the author is still sticking to his expectation of growth based on the first cryptocurrency’s rise.
7. Trade by Booba (48,000 followers)
The author’s opinion has not changed during the week. The author still expects a rise to $28,000-$30,000.
8. Pimen (17,000 followers)
The author’s opinion has not changed during the week. The author suggests that according to the indicators, growth is still preferable.
9. Crypto Mentors (18,000 followers)
This week the author was sticking to the view that bitcoin will go down in the medium term. Macroeconomic indicators are negative, Risk On mode at institutions is still off.
10. Dow Jones Crypto (10,000 followers)
The accumulation is in a downward wedge, this week’s daily close is a very powerful pinbar. Also the upside argument is that a repeated price drop under $18,000 would definitely send the price deep below and while the price is higher, it is worth longing. To sum up — growth as long as the price is above $18,000.
Outcome
- Hamaha — up.
- Mr. Mozart — 50\50. As long as it’s above $18,400 — up. Otherwise, deep down.
- Tears of Satoshi (in the original — Слезы Сатоши) — down.
- Head of Crypto (in the original — Главный по крипте) — up.
- MMarketMaker — up.
- Top Traders — up.
- Trade by Booba — up.
- Pimen — up.
- Crypto Mentors — down.
- Dow Jones Crypto — up.
7/10 traders are looking in favor of growth (up). 2 traders as the main movement are waiting for a fall (down). 1 trader is in an uncertain state.
A greater preponderance in favor of growth persists. Making statistics based on 10 traders, 75% of opinions are in favor of growth.
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
The author speaks of a strong bearish trend, but as $17,600 has not been broken through yet, an increase is more likely. Conclusion: 50\50.
2. Coin coach
Long and short trades are generally equal. 50\50 situation.
3. MM club
The main expectation for bitcoin is to go up, hold a long on bitcoin and buy an alta.
4. Crypto coin B
All deals are for growth only.
5. DW Trade
The latest trade on bitcoin is long, holding on to some open long positions opened on the recent spill. A solid market uptrend is expected, judging by expectations of an Ethereum (ETH) uptrend.
6. Ghost trade
It is expecting of a rise to $25,000, based on the indicators. A slight decline towards $16,000 is being considered, but the outcome of this option as in the first case is $30,000-$35,000.
7. Ark (in the original — Ковчег)
No idea where the price will come out of the sidewall, only small movements are traded. Conclusion: 50/50.
8. Waveform analysis (in the original — Волновой aнализ)
Silver, gold, the stock market, some alta — the author was seriously shopping around.
9. P4M
An alta is being bought with very serious growth targets.
10. Jewtrade
The trader did not suggest bitcoin as well as the market after the fall-off that week, during the week trades were opened with a 4\2 ratio to the long side. Conclusion: the rise is more expected.
11. Romanov
Four more altcoins have been bought into the investment portfolio. The expectation for bitcoin in the short term is growth.
12. Trading in crypto TG
The author believes that the take-out that week was the final one and the rise to $23,000.
13. Booba Signals (in the original — Booba Сигналы)
The author suggests that the bears have had enough, while the bulls are now being fed. Alta is being bought. Buying bitcoin long with a target of ~$40,000.
14. Aziz analytics (in the original — Азиз аналитика)
It talks about a price range in which the movement is perceived to be flat only. When the price moves out of one of the bounds, then it is worth joining the move. Conclusion: 50/50.
15. FED RUSSIANS INSIDER
The author says that the price needs to rise before entering a long trade in order to reduce possible losses. Conclusion: flat, 50/50.
Outcome
- BelnCrypto Premium Channel — 50\50
- Coin coach — 50\50
- MM club — up
- Crypto coin B — up
- DW Trade — up
- Ghost trade — up
- Ark (in the original — Ковчег) — up
- Waveform analysis (in the original — Волновой aнализ) — up
- P4M — up
- Jewtrade — up
- Romanov — up
- Trading in crypto TG — up
- Booba Signals (in the original — Booba Сигналы) — up
- Aziz analytics (in the original — Азиз аналитика) — 50\50
- FED RUSSIANS INSIDER — 50\50
11 traders are looking in favor of growth, 4 are in a wait-and-see position. Converted to a one-sided exit percentage, 86% of expectations are in favor of growth.
Incredibly, but more than 2\3 channels prefer purely growth, buying crypto and recommend it to their clients.
It’s really hard to assess the quality of all the channels. I’ve been following some channels for a long time, and the way they’ve been buying continuously since the drop from $69,000 I’ve seen for myself. Some started to buy at around $30,000. But in order to drawing up the most accurate statistics possible, it would take 2–3 months of observing all the channels.
Local estimate — almost every signal VIP group is waiting for growth.
Social media sentiment
Next, social media activity related to bitcoin and the crypto market will be examined.
Telegram
Today marks the lowest level of activity in three years. The Telegram platform has lost a huge number of crypto fans…
Twitter activity is steadily low.
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).
This time only Twitter was highlighted, Reddit\Telegram was excluded due to low activity in recent months.
In the previous review week #40 (link — in russian version) there was a slight surge in buying sentiment, this week there was a pullback. A small amount of buying activity remains in place.
“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).
Activity continues to decline, as stated in the previous review.
“short” keyword
Logic: The surge precedes the rise or during the peak of the fall. Detailed description in week #39 (link — in russian version).
Activity is low, with no spikes.
Conclusion
In week #39 (link — in russian version) we talked about a small spike in buyer sentiment. This week, quite a large percentage of these buyers have likely been stopped or liquidated.
There is still little buyer activity, while seller activity remains minimal.
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
The price recovered by 0.01% after the recent dip.
Bitmex
On this exchange, the financing rate is negative. But it should be noted that the rate on this exchange has been predominantly negative all the way down from $69,000.
Conclusion
The funding rate is still in a balanced position. On Bitmex the rate is slightly negative, on Binance — positive, overall this suggests that the market is in a balanced position without a pronounced aggression dominant side.
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.
At the moment the indicator does not show an oversold market, moreover, the value is close to balance.
Conclusion
The indicator is in a balanced position, there is no oversold position.
Liquidations
General analysis: There were 10 short liquidations and 10 long liquidations above 2.4k btc in the last three months. The total of long liquidations is slightly higher (by the number of contracts). There are also more peak bursts of long liquidations.
Despite the recent short-term hike downwards, few longs have been liquidated. This is a fairly bullish indicator that there are not many longs in the market. But it is important to take into account that the extremum has been updated only slightly and the main liquidity has NOT been collected. This is perfectly illustrated by the example below, which I have written about several times in my Telegram channel.
Conclusion
Not many longs were liquidated on last week’s takeout. But given that the extremum was updated by only a dozen dollars on the futures, it does not make sense to talk about any liquidity accumulation.
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: 24
The indicator shows a quite stable value for a bear market. With the same indicator values, the price was falling from $40,000 and from $30,000.
Conclusion
At the moment the indicator is in a fairly calm state, which is typical of a bear market. There has been no panic in the market for four months.
Weekly poll
This week’s poll results:
All sentiment review surveys:
As is clearly visible that how for three weeks there was a continued downward bias, but after a jump down without removing liquidity, the market sentiment has shifted already in favor of balance.
Grand total
According to public reviews by major analyst-bloggers, 75% are in favor of growth. According to private reviews, 86% of analysts are in favor of growth. According to social media measurements, seller’s activity continues to wane and little buyer’s activity is seen again. Most indicators show a balance. There is no fuel for an increase, as was the case last summer or before the last bullish rally. The weekly survey also shows a partite after 3 weeks of waiting for a decline.
Conclusions and author’s view
It is amazing how so many signal groups agree in sync. No one is considering an exit from the accumulation in favor of a decline, no one at all. A few analysts are looking at a 50\50 move.
The following expression among traders is relevant now:
Everyone is talking about a $12,000 drop, the crowd is selling, so the rise will be a surprise to everyone.
The outcome just for these people is likely to be a surprise. Judging by the actual data, hardly anyone is seriously expecting a fall as the main scenario.
The Hamster got smarter and looking at all the previous cycles and popular indicators — continues to hold a losing position much more stubbornly.
This expression is also quite current.
Analysts are all for growth and various metrics show a balance. The fuel for strong growth is nowhere to be seen.
Bitcoin could rise by 10–20% and even 30% before the bottom is updated. But this will be nothing more than a short-term takeaway before a further plunge. Technical reviews are in favor of a fairly logical small rise now before the US election. Therefore a rise in the near term is possible, organize a jump up, drive those, who are selling now into FOMO and then collapse the markets by 50%. But there is no reason for a new bull run, a move towards ATH.
The expectation from the market is that the bottom will be updated with a serious dip lower. Whether this will happen now or in another month of flat is hard to say, but this review is not designed to catch short-term impulses, but to calculate the medium-term movement of bitcoin.
If you are interested in the author’s other researches, as well as current thoughts on the crypto market, follow Crypto Shaman in Twitter.