Santiment’s Insight: FUD Often Precedes a Price Surge.
The OG cryptocurrency is atypically undecided, with the last 7 days showing a 1.47% loss, almost the same as Bitcoin’s movement over the last 24 hours: -1.50%. Ethereum, the second cryptocurrency by market cap is showing a very similar behaviour: -1.42% for the last 7 days and -1.46% in the last 24 hours. In other words, the two biggest digital assets have been almost completely stagnant over the last 7 days.
This lull is likely to come to an end soon, mainly due to the Jackson Hole speeches. Fed Chair Jerome Powell is set to speak about the economic outlook today at 2:05 pm GMT. The topic “economic outlook” includes the interest rate, so we can expect (read “we can be sure”) that Mr Powell will touch on the ever-delicate and important subject of the interest rate. His speech will be followed by speeches from other FOMC members and by ECB President Christine Lagarde’s speech later at 7:00 pm GMT.
Volatility may increase during and after the speeches, but the direction is tricky. Crypto analysis firm Santiment believes that the next move will be bullish, tweeting: “A positive sign that crypto markets will rebound is the fact that traders are increasingly referring to current market conditions as a bear market.”
The company continued with: “Historically, when traders show #FUD, the probability of price rises increases considerably.” FUD is the acronym for “fear, uncertainty, doubt” and Santiment emphasized that periods of increased FUD are often followed by a price surge.
Chart Analysis – BTC/USD
Last week’s drop came after a long period of sideways movement but it looks like the pair hit an invisible wall. After the drop, BTC/USD traded completely sideways but this looks to be just the calm before the storm.
The Relative Strength Index (RSI) is oversold and if we compare the last trough (at $25,000, where the bullish trend line originates), with the current one, we can see there is bullish divergence: the price is making a higher low and the RSI is making a lower low. This is a sign that a move north will follow; however, the timing is tricky.
The Jackson Hole Symposium is in full swing and today’s speeches will probably have an impact on legacy assets, as well as decentralized ones. Pay extra attention to Chair Powell’s speech as it could trigger the next move.