Bitcoin buying interest is waning as investors wait for a potential bottom
The cryptocurrency market has failed to sustain recent short-term gains after the US inflation rate continued to rise. Following the price correction, Bitcoin (BTC) investors are looking for a possible bottom, a scenario that could trigger more buying on the decline.
As of September 14, amid the short-term price correction, investor interest in buying Bitcoin remained low compared to when the asset’s value rose, Santiment Behavioral Analytics data indicates.
Notably, the total social volume analyzed is 94,862, with the terms “buy” or “buy” or “purchased” accounting for just 5.06% at 4,799.
“After yesterday’s big drop, crypto traders are showing signs of being numb to sudden falls from inflation-related scares. The amount of interest to buy is especially small now compared to when prices rose three days ago, suggesting FUD,” Santiment said.
Implication of reduced buying interest
The latest trend appears to be different from the historical path where investors buy Bitcoin when the price falls. In this case, it can be assumed that investors are anticipating a further collapse in Bitcoin’s prices before buying.
At the same time, the Santiment data indicates that buying interest increased as Bitcoin tried to stabilize above the crucial $20,0000. The trend may be interrupted as investors react to the fear of missing out (FOMO).
In addition, cryptocurrency analyst Willy Woo has suggested that Bitcoin is not yet bottoming out based on historical trends.
“Have we hit rock bottom? Historically, bottoms coincide with short-term owners having a lower cost basis than long-term owners. We are close, but not there yet. A little more time to burn IMO,” he said in one chirping on September 14.
Bitcoin Reaction to CPI Data
It’s worth noting that Bitcoin’s price plunged in the wake of the CPI data release, but before the crash, the flagship cryptocurrency had been rising consistently, moving to a three-week high, and topping the $22,000 level.
With rising inflation, the Federal Reserve is expected to raise interest rates, a factor that is likely to negatively impact Bitcoin. In this vein, as reported by Finbold, Bloomberg Intelligence senior commodity strategist Mike McGlone believes that Bitcoin is likely to come out ahead of the current economic state.
An overview of Bitcoin shows that the asset is still correcting, trading at $20,300 as of press time, having fallen nearly 10% in the last 24 hours.
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