Bitcoin Market in Confusion as BTC Rebounds to $40k, Expert Suggests the Best Trading Approach

According to crypto analytics firm Santiment, Bitcoin has rebounded back above $40,000 recently, leading to divided sentiment on social platforms. In a recent tweet, Santiment noted that “When Telegram, Reddit, X, and 4Chan are all in an extreme level of bullish or bearish sentiment, this is the ideal time to be a contrarian and go against the crowd’s uniform presumptions about the markets.”

The firm explained that extreme bullish or bearish emotion across multiple platforms typically signals volatility ahead. As such, Santiment suggests that taking a contrarian investing stance during these periods may be prudent.

Source: Santiment – Start using it today

Contrarian Bitcoin Strategies When Sentiment is Extreme

The contrarian approach means resisting the urge to get caught up in the dominant market narrative on platforms like Reddit and Telegram. When euphoric bullishness or doom and gloom permeates across threads, experienced crypto traders often zag when the crowd zigs.

Source: Santiment – Start using it today

Potential contrarian moves when extreme bearish sentiment prevails include strategically buying the dip or dollar-cost averaging into Bitcoin. When irrational exuberance reigns, contrarians may consider taking profits or waiting on the sidelines for the next inevitable crypto cool-off period.

Santiment says it will continue updating followers on when uniform extremes in sentiment emerge across crypto social channels. Paying attention to these signals and avoiding the pull of the crowd can give savvy Bitcoin traders an edge amidst the market’s volatility.

Executing contrarian strategies requires patience and experience identifying emotional extremes. Yet for disciplined crypto investors, resisting the prevailing social narrative may lead to success.

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Temitope Olatunji
Temitope Olatunji

Temitope is a seasoned writer with over four years of experience. He specializes in Web3 and FinTech topics and enjoys creating content in these areas. He holds both a bachelor's and master's degree in Linguistics. When not writing, he trades forex and plays video games.