Bitcoin (BTC) prices have far higher to go during their current market cycle if crowd sentiment takes charge, according to analysis of the Bitcoin Days Destroyed (BDD) technical metric.
In social media posts on Aug. 22, Hans Hauge, senior qualitative researcher at crypto investment fund Ikigai, identified Bitcoin sentiment as being similar to early 2017. That was just months before the cryptocurrency reached its all-time high of $20,000.
In a tweet accompanied by a corresponding chart, Hauge wrote: “Bitcoin bubble tops are clearly identified with a dark red cluster of Adjusted Binary BDD.” He added:
“Until that happens, we’re not at the top. Public opinion is key here because that red cluster is caused by the assumption of the crowd and is self-fulfilling (reflexivity).”
What is BDD?
BDD refers to the amount of time between movements of an amount of Bitcoin. Higher prices tend to coincide with coins moving more often — and at present, Hauge says the opposite trend is apparent.
Coupled with this, as Cointelegraph recently reported, the Bitcoin Fear & Greed Index, which also measures market sentiment, remains near the bottom of its possible range.
“That’s the exact thing you should be looking for if you’re buying the dip for the long-term,” Hauge advised.
Bitcoin accumulation phase due for timeout
BTC/USD has languished in an uninspiring sideways pattern for much of this month, leading to warnings that a downturn is on the way.
Next in line could be a trip to the $7,000 range, according to another trader who argues that such a pullback remains historically plausible and would not suggest a bear market.
Zooming out, other market analysts predict just the opposite: fresh gains to be characterized by next year’s block size reward halving due in May.
PlanB, the Twitter account championing the stock-to-flow method of predicting Bitcoin price, also suggested current behavior mimics that of early 2017.
“Bitcoin’s 3 month struggle to break the magical $10k feels like begin 2017 struggle to break $1k … we all know what comes next,” he tweeted last week.