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Cryptocurrencies have returned to a phase of negativity, yet BTC remains above $90,000. This is intriguing as it suggests that the main pessimism may have already passed. In November 2022, discussions about BTC potentially dropping to zero arose when prices reached $15,500. With short-term fluctuations in the spotlight, market participants are being cautioned about potential risks.
Market Sentiment Indicators
BTC charts may not reflect this, but investor sentiment clearly indicates a new low is being approached. Altcoins have faced significant pressure since mid-December. QuintenFrancois shared a graph showing that sentiment levels signaling a bottom have indeed been reached, suggesting that worse outcomes are unlikely and that cryptocurrencies may rise again.
“Crypto sentiment is at unprecedented levels since Bitcoin 
$104,557 hovered around $38,000 in December 2023. Act accordingly.”
Another indicator is the rise in ETH short positions. Hedge funds have increased their short positions, leading Ether to break historical records in short sales.
“The amount of short selling on ETH has reached a new all-time high.
Typically, shorts peak during periods of excessive downward stress. This liquidity is often what markets need to reverse course swiftly. A great sign.” – Michael Poppe
Historical Data on Cryptocurrencies
If we are to experience a period similar to 2021, cryptocurrencies should begin their anticipated rise. Daan Crypto Trades shared a table illustrating historical price performance, encouraging investors to move away from despair.
“BTC typically performs best in the year following a halving event (2013, 2017, 2021, and 2025?). As you can see from the weekly performance rankings, these years don’t always start off great.
It has become clear that 2017, one of the recent best years, initially showed poor performance. The lesson here is that people tend to overvalue short-term price movements in their long-term expectations. Many long-term trading ideas seem influenced by the color of the last weekly candle. Generally, going with the trend is the best option. Even if you expect a certain year or quarter to perform well, it shouldn’t affect your view if the first day doesn’t go as expected.”
