FUD Alert for Cryptocurrencies: Here's What to Watch Out For!

Bitcoin has been on the decline since the approval of spot Bitcoin ETFs in the United States. After the ETFs were approved on Jan. 11, the price of Bitcoin rose to as high as $49,000, but then fell below $39,000. Cryptocurrencies in general have also bled to death. Here are the details...

Santiment assesses Bitcoin decline

Commenting on this decline, Santiment pointed out that Bitcoin fell to these price levels for the first time since December 2023 and described this decline as a bloodbath. In addition, Santiment stated that there was a decrease in Bitcoin and Ethereum (ETH) talks compared to the ETF approval week, and said that FUD started to rise and argued that this could be a bullish signal. Given that historically there has been a positive correlation between the level of FUD and the likelihood of a price bounce, according to Santiment analysts, he points out that as the FUD settles, the probability of prices bouncing increases.

📉 > #Bitcoin briefly fell below $40K for the first time since December 4th. Monday has been a bloodbath for most of the #crypto sector. Notably, there is 35% less discussion toward $BTC and 21% less toward $ETH compared to the prior #ETF approval week. #FUD business

(Cont) 👇 pic.twitter.com/iievb8mbHJ

— Santiment (@santimentfeed) January 22, 2024

List of FUDs for cryptocurrencies from Layergg

On the other hand, Layergg, a renowned cryptocurrency analytics company, has compiled a list of potential FUDs to expect in the coming period. Here's the list of FUDs compiled by the analytics company:

• Grayscale is expected to sell between BTC 10,000 and 25,000 every day. According to the analytics company, outflows are not slowing down; in fact, it is increasing. The total outflow so far stands at a staggering $3.45 billion. Remarkably, FTX has sold nearly $1 billion of Grayscale's GBTC since its Bitcoin ETF approval.
• The BTC distribution of sunken cryptocurrency exchange Mt.Gox is expected to take place in the next two months, with 200,000 BTC unlocked. In December 2023, some Mt.Gox creditors received compensation in yen via PayPal. It should be noted that according to analysts, most Mt.Gox holders have a Bitcoin purchase price of less than $1000, which may affect their selling decisions.
• The U.S. government currently has about 100,000 BTC related to Silk Road. They had announced plans to sell the 50,000 Bitcoins seized from Silk Road in four installments, but there have been no updates since July. However, it is likely to continue with the ETF going live.
• Grayscale holds $7-8 billion of the Ethereum futures ETF ETHE. Similar to GBC, ETHE was trading at a discount of up to 50% compared to its regular price until recently. This suggests the possibility of an Ethereum version of the "ETF – Sell the News" event. Interestingly, FTX's ETHE holdings are about a quarter of GBTC's.

Quick Thread on Upcoming FUD:

– $GBTC outflow ($500-600mil/day)
– Mt.Gox 200,000 BTC Unlock
– Silk Road 100,000 #BTC
– Grayscale $ETHE

🧵👇

— Layergg (@layerggofficial) January 23, 2024

The rise of the FUD is a bullish signal

According to Santiment analysts, the rise of the FUD can be interpreted as a bullish signal. This is because FUD often causes oversold in the market, which leads to further declines in prices. However, when the FUD reaches its peak, it suggests that the market is oversold and prices may start to recover. Therefore, there are signs that Bitcoin may start to recover in the coming period. However, for this to happen, the FUD must reach its peak and the market must be oversold.

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