Sentiment towards altcoins has turned bearish among crypto traders, according to blockchain analytics firm Santiment. In a tweet yesterday, the firm reported that short, mid, and long-term indicators are warning signs of growing fear, uncertainty, and doubt (FUD) among altcoin holders.
Notably, Santiment discussed compelling reasons to consider certain Altcoins for purchase amid mounting losses:
📊 #Altcoins have some justification to buy with average traders well under water across short, mid, and long term timeframes. $QUICK, $OMG, and $RAD have traders showing serious #FUD with losses piling up, which historically makes them less risky to open or add to a position in. pic.twitter.com/uHkc6EY1nQ
— Santiment (@santimentfeed) July 24, 2023
Santiment has specifically pointed out that traders have incurred substantial losses with Quickswap (QUICK), OMG Network (OMG), and Radicle (RAD) coins. The analytics provider noted that historically, assets that have faced prolonged selling pressure often become less risky entries for new positions.
The downbeat outlook comes as the crypto market endures a month-long slump, with Bitcoin struggling to break out above $30,000. The flagging momentum has weighed heavily on altcoins, with many smaller-cap digital assets nursing double-digit declines over the last 30 days.
According to Santiment, the building FUD makes altcoins like QUICK, OMG, and RAD prime candidates for a relief rally. The firm’s analysis tracks crowd sentiment, which tends to reach extremely negative levels before assets bottom out and change direction.
However, analysts caution that bearish sentiment could persist for long periods during crypto winters. With macroeconomic headwinds still blowing, traders may need to endure an extended cooling-off period before the next leg higher.
Yesterday’s tweet reminds market participants that crypto fundamentals remain speculative. While crowd metrics can pinpoint potential turning points, assets with weak use cases or community traction carry substantial downside risks. Traders should exercise caution and only allocate what they can afford to lose.
Amid the prevailing bearish sentiment, cryptocurrency traders are facing losses as altcoins struggle in the current market environment. Santiment’s analysis suggests that assets like QUICK, OMG, and RAD, which have experienced significant selling pressure, might present opportunities for traders seeking to enter the market. However, caution is advised, as the bearish sentiment could persist for a prolonged period.
Investors in cryptocurrencies are cautioned to exercise extreme caution and carefully weigh each altcoin’s merits and risks before making any purchases. As the market continues to weather macroeconomic headwinds, prudence and careful risk management are essential for navigating these challenging times.
