Bitcoin’s price has been on the rise lately, and everyone’s talking about it. Some people think it’s all about hype and positive sentiment, but one expert says it’s much simpler than that.
The Crowd Doesn’t Always Know Best
A market intelligence platform called Santiment noticed a huge surge in positive sentiment around Bitcoin. People are excited, and many think it’s going to hit $70,000 soon. But Santiment warns that this kind of hype can actually be a bad sign. Historically, markets tend to move in the opposite direction of what everyone expects.
Supply and Demand: The Real Drivers
Axel Adler Jr, a researcher who analyzes Bitcoin’s data, disagrees with the idea that crowd sentiment is the main factor driving Bitcoin’s price. He believes it’s all about supply and demand.
“The main factors that drive the market are always supply and demand,” he says. While social media can reflect what people are thinking, it doesn’t necessarily translate into actual buying and selling.
Bitcoin Holders Are Feeling Good
Another piece of evidence supporting Adler’s view comes from CryptoQuant, a platform that analyzes Bitcoin data. They found that a large percentage of Bitcoin holders are still making a profit. This is a strong indicator that a bull market is in progress.
Even when the profit margin dipped below 80% in the past, CryptoQuant saw it as a buying opportunity.
The Bottom Line
While hype and sentiment can influence Bitcoin’s price in the short term, Adler believes that supply and demand are the real forces behind its long-term price movements. So, if you’re looking for clues about Bitcoin’s future, keep an eye on the fundamentals.
