Time to buy? Social media analysis says Bitcoin will rise soon

On-data analysis provider Santiment tweeted that the degree of so-called social media sentiment, which measures the emotions behind social media and other online mentions, is at its greatest since November’s initial decline after a record high for BTC. According to the company, this indicates bullish momentum the moment when the price starts rising ahead. That would be great, given the extended crypto winter.

What is happening

Inflation figures for June will be released by the US Labor Department this week. As economists say, the Consumer Price Index (CPI) a higher CPI indicates higher inflation, while a falling CPI indicates lower inflation or even deflation will rise by 1.1% every month and an annual rate will grow from 8.6% to 8.85%, far below the Fed’s The Federal Reserve System is the central banking system of the United States of America 2% goal.

In simple words, the situation in the U.S. economy is vital for cryptocurrencies. Extraordinary measures to stimulate the U.S. economy during Covid have led to rampant inflation, which the Fed seriously underestimated. It must be defeated to prevent economic problems, including in cryptocurrency.

According to deputy chairman of the Federal Reserve Lael Brainard, the cryptocurrency industry is subject to risks that are too familiar from the traditional financial sector.

“It’s time to make sure the same risks are subject to the same regulation and disclosure requirements to help investors distinguish between true responsible innovation and the false appeal of easy-looking earnings that hide risks,” she said.

However, WSJ experts don’t quite agree with her. They note that despite the significant losses investors are suffering as a result of the cryptocurrency crash, the industry as a whole is not so large and so interconnected with traditional banks and financial companies as to pose a systemic risk to the economy.

Social media sentiment

Social media sentiment is measured by:

• Willingness to recommend.
• In-app ratings.
• Direct feedback.
• Comment velocity.
• Comment tone.
• Reaction tone.
• Shares and mentions. 

“Bitcoin’s social sentiment is seeing unprecedented optimism this week as we head into the second half of July and the Fed’s next decision. An ideal setup would be the crowd remaining skeptical as prices climb with little resistance,” Santiment tweeted.

The Fed’s chairman Jerome Powell also said that he doesn’t believe rates would be raised by that amount regularly in the future.  

It’s worth to be mentioned that since November 2021, when the Federal Reserve took a more active approach to interest rates, major cash has been withdrawn from the cryptomarkets. Since then, a total of $2 trillion has been eliminated.

At the moment of writing, Bitcoin is trading for $20,543. The coin has been down 3.78% in the last 24 hours. 

Even though the cryptocurrency market continues to be in bad shape, companies continue to buy the coins. And this is done by both prominent market players and small investors.