Lending protocol A recent hacking incident using Sentiment resulted in the perpetrator stealing close to one million dollars. However, because to a reward of $95,000 that was offered to the hacker, the protocol was successful in recovering the stolen cash. Through the use of the Arbitrum blockchain, Sentiment spoke with the hacker, imploring them to “do the right thing” and restore the cash by April 6 at the latest. In addition, the policy guaranteed the same payment to anybody who was able to assist in determining who was responsible for the crime and bringing them to justice.
After monitoring the situation, the creator of MetaMask, Taylor Monahan, made the announcement that the hacker had returned 414 ether, which is equivalent to around $771,000 at the current exchange rate. After some time had passed, the hacker sent a further 51.75 ETH to the recovery address provided by Sentiment. The protocol said unequivocally that it had been successful in acquiring the monies and that the problem had been fixed.
On April 4, a hack was carried out, and it is thought that it was carried out as a consequence of a re-entry assault or a flaw. As was stated by a few members of the community, this episode underscores how critically important it is for businesses to take bug bounties seriously. Even one of the members gave the hacker kudos for “taking it by force” with their efforts. On the other hand, a different user of Twitter voiced their disapproval of the event, labeling it as “a bug bounty with a criminal step,” and asking businesses to provide greater and more open bug bounties.
Comparisons have been made between this attack and the recent one that occurred at Euler Finance, in which the Ethereum protocol awarded a reward to a hacker who returned almost 90% of the assets that had been taken. The hacker returned over 176.4 million dollars in digital assets while keeping roughly $20 million for themselves. Because of this occurrence, the significance of bug bounties as a method for resolving vulnerabilities in protocols for decentralized financial transactions has been further highlighted.
It is very necessary for businesses to take bug bounties seriously and provide awards that encourage ethical conduct in their employees. The usefulness of this strategy was recently shown by the fact that Sentiment was successful in regaining its data. Moving ahead, it is probable that other organizations will adopt similar tactics to manage possible security breaches in their systems. This will increase the likelihood that these breaches will occur.
The crypto market has continued to struggle after running out of steam with its last rally. During the last lap of the year, the market as a whole is not doing too well, although prices of cryptocurrencies are way higher than they were this time last year. Nonetheless, there have been some interesting trends that have emerged with the market crash that has seen prices stagnate at this time.
The Fear & Greed Index has shown that market sentiment has gone into the extreme negative once again. With prices of top assets like bitcoin and ethereum trading below important support points, sentiment has fluctuated widely in the market but has mostly stayed in the negative. This time around, market sentiment has dropped low and landed in the ‘extreme fear’ territory.
Related Reading | Algorand, Solana, And More Lead List Of Biggest Losing Altcoins
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Crypto Market Basking In Fear
The crypto market has spent a good portion of the month of December in the fear territory. Market prices haven’t been the most favorable for the month and investors remain incredibly wary of getting into the market at such a time. Others have however seen this as a buying opportunity like in the case of MicroStrategy, which bought an additional 1,434 BTC bringing its total holdings to 122,480 BTC.
The aggregate for the month of November came out to neutral on the sentiment side of things after a tumultuous end to an otherwise wonderful beginning of the month. That has spilled into December as Christmas rolls around.
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Market goes into extreme fear | Source: alternative.me
Yesterday the Fear & Greed Index had peaked at 29 on the chart, putting the market in the fear territory. This was up a bit from last week where the market spent long stretches in extreme fear. Today, market sentiment again rolled into the extreme fear territory with a low 23 on the chart.
The index being this low shows that there are low buying pressures in the market and high selling pressures. Sell-offs are still underway in various digital assets that have seen their prices dip into the red. As the market heads into the weekend which is usually characterized by low volatility, will the market be able to pull itself out of extreme greed?
Bitcoin, Ethereum Suffer Losses
Bitcoin had made a splash in the market when it had hit its new all-time high slightly above $69,000 at the beginning of November. This had sent the crypto market on what would be a memorable bull run as Ethereum came close to hitting the $5,000 mark not too long after. But this would only be short-lived as the downtrend had begun not too long after.
Related Reading | Crypto Bull Cathie Wood Says Ethereum Is More Undervalued Than Bitcoin
For Bitcoin, the digital asset had lost as much as $10,000 in a single day that sent it towards the low $40,000s. Ethereum on the other hand had held out for a while but succumbed to the downtrend in time.
Bitcoin is now trading well below $50,000 after failing to hold above this price point this week. Ethereum is now trading below $4,000, a crucial support point for the digital asset. At the time of writing, bitcoin is trading at $47,141 and ethereum is trading at $3,826.
Crypto total market cap at $2.16 trillion | Source: Crypto Total Market Cap on TradingView.com
Featured image from Bitcoin News, chart from TradingView.com
Bitcoin (BTC) recently breached the psychological level of $40K, a fate which the leading cryptocurrency had tried for months in vain. As a result, crowd sentiment towards BTC has been on an upward trajectory because more traders have become optimistic about this cryptocurrency scaling the heights.
“Bitcoin has settled into a $45K to $48K range that has encouraged traders to FOMO in anticipation of another run toward April’s ATH. Our data indicates optimism is up, but not euphoric in a way that leads to imminent BTC corrections.”
Bitcoin’s previous bull run touched an all-time high (ATH) price of $64.8K recorded in mid-April, prompted by significant institutional investment.
Nevertheless, a correction was imminent, which drove the price to lows of $28K as the crypto mining crackdown by Chinese authorities intensified from May.
Bitcoin stands at a region encountering heavy resistance
According to market analyst Michael van de Poppe, Bitcoin faced notable resistance between the $46K and $48K range. He explained:
“Bitcoin looks a bit over-exhausted in this region + heavy resistance.”
Crypto trader tweeting under the pseudonym CryptoHamster had previously noted:
“Bitcoin broke the 200D MA. The price is facing the resistance of the previously built sideways area with a large volume. One could anticipate the rejection from here initially, but if BTC keeps testing it, we might see the further evolution of the bullish scenario.”
Meanwhile, the three major central banks, namely the Federal Reserve (Fed), the Bank of Japan (BoJ), and the European Central Bank (ECB), seem to play an instrumental role in Bitcoin adoption.
Specifically, the value of BTC rises almost in tandem with the combined balance sheet of the three central banks. The combined balance sheet of Fed, BoJ, and ECB stands at almost $25 trillion.
Ether (ETH) rallied 35% over the past ten days and reclaimed the critical $2,300 support, but the crucial $2,450 local top hasn’t been tested since June 17. Part of the recent recovery can be attributed to the London hard fork, which is expected to go live on Aug. 4.
Traders and investors view the EIP-1559 launch as a bullish factor for Ether price because it is expected to reduce gas fees. However, Ether miners are not thrilled with the proposal because the proof-of-work model will no longer be necessary after ETH2.0 goes live.
The network fees will automatically be set, although users can choose to pay extra for faster confirmation. Miners (or validators in the future) will receive this additional fee, but the base fee will be burned. In a nutshell, Ether is expected to become deflationary.
While it’s difficult to identify the main drivers of the recent rally, it is possible to gauge professional traders’ sentiment by analyzing derivatives metrics.
If the recent price move was enough to instill confidence, the futures contracts premium and options skew should clearly reflect this change.
Bullish sentiment is missing even after futures contracts entered contango
By analyzing the price difference between futures contracts and regular spot markets, one can better understand the prevalent sentiment among professional traders.
The 3-month futures should trade with a 6% to 14% annualized premium on neutral to bullish markets, which is in line with stablecoins’ lending rate. By postponing settlement, sellers demand a higher price, and this causes the premium.
Whenever the futures premium fades or turns negative, it raises an alarming red flag. This situation is also known as backwardation and indicates that there is bearish sentiment.
The above chart shows that the Ether futures premium flipped negative on July 20 as Ether tested the $1,750 support. However, even the massive rally up to $2,450 wasn’t enough to bring the September contract premium above 1.3%, equivalent to 8% annualized.
Had there been some excitement, the annualized futures premium would have been at 12% or higher. Therefore, the stance of professional traders seems neutral right now and is flirting with bearishness.
To exclude externalities exclusive to the futures instrument, traders should also analyze options markets.
Options markets confirm that pro traders are not bullish
Whenever market makers and whales lean bullish, they will demand a higher premium on call (buy) options. This move will cause the 25% delta skew indicator to shift negatively.
On the other hand, whenever the downside protection (put option) is more costly, the 25% delta skew indicator will become positive.
Readings between negative 10% and positive 10% are usually deemed neutral. The indicator had been signaling ‘fear’ between May 20 and July 19 but quickly improved after the $1,750 support held.
Despite this, the current 25% delta skew at negative 4 isn’t enough to configure a ‘greed’ indicator. Options markets pricing is currently well balanced between call (buy) and put (sell) options.
Both derivatives metrics suggest that professional traders gradually exited the ‘fear mode’ on July 20, but they are nowhere near bullish.
Currently, there is little confidence in the recent rally from these metrics’ perspective, which is understandable considering the risks presented by the upcoming hard fork and the uncertainty caused by unsatisfied miners.
The views and opinions expressed here are solely those of theauthorand do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
In the realm of digital assets, Crypto Twitter is a major seat of power. Memecoins and serious large-cap assets alike can see their value rise or fall depending on whether the whimsical Twitter crowd decides to pay attention.
Huge rallies and dramatic declines often trigger waves of Fear, Uncertainty and Doubt (FUD) or Fear of Missing Out (FOMO) on the platform, capable of massively amplifying the unfolding price dynamics.
Granted, it would be convenient if increases in Twitter volume always spelled price hikes — yet, as the facts demonstrate, this relationship is way, way more complicated than that.
Tweet volume is one of the ingredients of a proprietary formula powering the VORTECS™ Score, a machine learning algorithm that compares historic and current market conditions around digital assets to aid crypto traders’ decision making. The model considers a host of other indicators – market outlook, price movement, social sentiment, trading activity – to arrive at a score that assesses whether the present conditions are historically bullish, neutral, or bearish for a given coin.
This week, we follow five digital assets who made the biggest strides in terms of Twitter activity this month. All five added hundreds of percent of tweets compared to the previous month’s average – but how actionable were these dynamics for traders?
Here’s how the VORTECS™ Score could give investors a few hints.
Telcoin (TEL): +300% Twitter volume
Between May 2 and 5, as Telcoin (TEL) was bracing for a massive price leap that would take it from below $0.01 to above $0.05 within ten days, two considerable spikes in tweets tagging TEL occurred. While the coin would normally get several hundred mentions a day, these two peaks each saw more than 3,000.
Combined with other factors, this pattern was recognized as historically favorable by the VORTECS™ model, which dished out a very high score of 91 (red circle in the graph). A tremendous price run followed less than a day later. Further tweet volume spikes this month followed price surges rather than preceded them.
Overall, in the last 30 days, Telcoin delivered 189% vs. USD and 345% vs. Bitcoin.
Polygon (MATIC): +240% Twitter volume
Twitter activity around MATIC and its price action entered a virtuous circle in May, with each leg of the price rally triggering a surge in chatter which, in turn, preceded a further round of the token’s appreciation.
Of course, there was much more to Polygon’s remarkable month, with a slew of positive real-world developments and trading activity spikes, but tweet volume appeared to be an essential feature of each VORTECS™ score peak (red circles in the chart).
MATIC’s monthly gains: 125% vs. USD and 248% vs. BTC.
iExec (RLC): +711% Twitter volume
iExec (RLC) emerged as the biggest winner in terms of added tweet volume this month, yet its price increase has been more modest: 60% against USD and 148% against Bitcoin.
In RLC’s case, as the charts illustrate, spikes in tweet volume were largely reactive and merely followed price action. The coin’s VORTECS™ score has been largely neutral ahead of the rally that started around May 9, suggesting that the combination of market conditions preceding it has not been frequently observed before.
Solana (SOL): +525% Twitter volume
Solana (SOL) saw its average tweet volume increase more than four times compared to the previous month, yet almost all corresponding price gains got wiped out by the end of May: -31.48% against USD and +6.06% against Bitcoin.
Tweet volume largely lagged behind the price movement, with one notable exception: An outsized jump from 5,000 to 20,000 tweets on May 17 that contributed to an 80+ VORTECS™ score and came some 36 hours before the coin reached its all-time high near $58 (red circles in both charts).
Ethereum Classic (ETC): +321% Twitter volume
While the reasons behind Ethereum Classic suddenly surging from $40 to $160 in the first week of May remain a mystery, we can be fairly certain that an explosion in the volume of Twitter conversation was not one of them: All the added tweets came in response to the price rally.
The VORTECS™ algorithm hadn’t sensed a historically favorable outlook, either, as the score mostly remained in the neutral zone.
ETC ended the month with +67.36% vs. USD +158.85% vs. Bitcoin.
An uptick in Twitter activity around a digital asset can mean a variety of things, depending on the configuration of other important market and social indicators. The VORTECS™ Score, exclusively available to Cointelegraph Markets Pro members, can contextualize tweet volume within a constellation of other market-moving metrics.
For those who prefer to leverage raw data, the absolute number of tweets and current vs. average tweet volume are readily available as separate metrics on the market intelligence platform.
Cointelegraph Markets Pro is available exclusively to members on a monthly basis at $99 per month, or annually with two free months included. It carries a 14-day money-back policy, to ensure that it fits the crypto trading and investing research needs of subscribers, and members can cancel anytime.
Cointelegraph is a publisher of financial information, not an investment adviser. We do not provide personalized or individualized investment advice. Cryptocurrencies are volatile investments and carry significant risk including the risk of permanent and total loss. Past performance is not indicative of future results. Figures and charts are correct at the time of writing or as otherwise specified. Live-tested strategies are not recommendations. Consult your financial advisor before making financial decisions.Full terms and conditions.
Analytics company Santiment reports that cryptocurrency sentiment has fallen to near-record low levels for 2021 — even as some experts are doubling down on $400,000 Bitcoin’s price target.
Sentiment nosedived following Bitcoin’s drop below $60,000 to its current price of $56,300 and Ethereum’s dip under $2,000 this week, according to Santiment. Ether is currently trading at $1,986
The crowd mood toward #Bitcoin and #Ethereum appears to have dropped to extreme negative territory after $BTC fell back under $60k & $ETH dipped back under $2k this week. Historically, buying during this level of #FUD & fear is a #bullish opportunity. https://t.co/u7LKbvoqSt pic.twitter.com/ZTxQFroEfM
— Santiment (@santimentfeed) April 7, 2021
But other analytics platforms show a less convincing shift with crypto predictive data platform Augmento seeing sentiment slide from ‘bullish’ to ‘slightly bearish’. The Alternative Crypto Fear and Greed index meanwhile shows almost no change, with the counter still clearly sitting at “greed”
Yesterday’s sell-off, which saw the entire cryptocurrency market cap drop briefly below $1.8 trillion before stabilizing around $1.9 trillion, doesn’t appear to bother seasoned analysts. Quantum Economics founder Mati Greenspan stated in his April 8 newsletter that the dip “took place on relatively low volumes.”
He noted that Bitcoin miners seem to have not even noticed the dip with the network’s hash rate reaching a new all-time high of 179 million exahashes, adding “that miners are hoarding Bitcoin right now instead of selling it back to the market.” This is often taken as a sign they expect higher prices.
History suggests BTC only getting started
Released on April 5, a report by Bloomberg Intelligence Strategist Mike McGlone predicted Bitcoin could soon approach $400,000 based on past Bitcoin bull runs, adding:
“In September, 180-day volatility on the crypto about matched the all-time low from October 2015. From that month’s average price, Bitcoin increased a little over 50x to the peak in 2017”
Although it doesn’t give a specific time-frame for when this peak might be achieved, the report does specify that over the next quarter the price is likely to “breach $60,000 resistance and head toward $80,000.”
Bitcoin analytics account “Ecoinometrics” tweeted that historically, the BTC price broke out between 300 to 350 days from previous halvings. We are currently at 329 days from the latest halving. If it plays out anything like previous halvings next May could see a Bitcoin price past $700,000… or drop to well below $40,000.
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A survey published today by Genesis Mining reveals that while the majority of Bitcoin investors are sold on the crypto’s ability and potential to replace gold as a safe-haven, few respondents are as confident of hitting $50,000 per BTC by 2030.
As Bitcoin exploded towards the end of 2020 and recorded gains of 160% for the year, news sites and Twitter feeds have reported an overwhelming bullish sentiment for the flagship cryptocurrency with projections ranging from $50,000 – $500,000 per BTC in the next few years. But a shock survey from Genesis Mining reveals that not everyone is so sure.
Institutional mining platform, Genesis Mining, conducted a survey to quantify the current Bitcoin investment sentiment. 1,000 US-based investors were surveyed revealing that although the majority were sure the BTC price would continue to appreciate—only 17% are betting on $50,000 BTC and only around 3.5% of respondents believe that the Bitcoin price can reach $500,000 by 2030.
The survey, however, found strong support for Bitcoin’s case as a store of value with two-thirds tipping BTC as a better long-term hold than the US dollar. Over 50% also tipped that Bitcoin will replace traditional safe-haven assets like gold and real estate within the next ten years.
“Should legacy economic systems collapse or experience shocks, Bitcoin is seen as a hedge against loss of personal wealth.”
A Look At The Findings
Genesis survey reveals that the overall sentiment for Bitcoin remains bullish in majority, but with only 17% predicting $50,000 by 2030 the findings indicates that that overall the respondents do not believe Bitcoin can grow another 160% in the next ten years—despite Bitcoin making an almost identical price percentage gain in just the last few months.
Just over half of BTC investors surveyed estimate that the Bitcoin price will be at $20,000 per coin or less by 2030—with one third predicting $10,000 or less and just over 10% expecting a crash to around $1000 in the same period.
A further 17% predicted that Bitcoin’s price would actually fall over the next decade, while one-sixth of respondents did not feel confident in speculating on BTC’s long-term price performance.
The results reveal that over 30% of respondents are expecting the Bitcoin price to move sideways or decrease over the next ten years due to regulatory pressure and around 20% are expecting overreaching government bans.
Nearly one-fifth of the respondents also expect Bitcoin’s dominance may be usurped by another cryptocurrency or even a central bank digital currency (CBDC) and nearly 10% of participants do not believe there will ever be any real-world utility for BTC.
From the findings, one-tenth of the most bullish respondents tipped Bitcoin would be worth six-figures by 2030, and half of these expect BTC prices to exceed $500,000. A more than a quarter of these bullish respondents are tipping that Bitcoin adoption will be driven by the waning trust in fiat currency and central bank monetary policy as well as a period of economic downturn.
While the sample size is not indicative of the entire global Bitcoin investor base, the revelations in the findings may serve as shock to most taking part in the current bull market. While the sentiment may seem overly bearish, Genesis highlighted in the publication:
“It is important to note that these are Bitcoin investors. By the very fact that they are invested in Bitcoin, they are bullish, at least to some extent. Yet, as the price of Bitcoin continues to trend upwards, bullishness has become increasingly synonymous with reality.”