2022 has not been favorable for cryptocurrencies and other crypto-related stocks.
Overall, the entire crypto market is in deep speculation as to where general digital markets may be headed next. And while some members of these markets continue to expect a bounce followed by favorable conditions, others are not so sure.
Most traders and investors have even expressed expectations that this current "winter" may continue, keeping in mind that this current market dip is already overextended as it is.
Weary institutional and retail investors prefer seeing their optimism turn into fruitful results. This is because a market bounce to the upside would benefit the entire digital market ecosystem.
The entire crypto ecosystem is in the red. Bitcoin, the largest cryptocurrency by market cap, currently sits below the $20,000 mark after a more-than 50% dip. Ethereum, the second largest cryptocurrency by market cap, has dropped massively, trading well below the $1,400 mark despite merging with the beacon chain and moving from Proof of Work to Proof of Stake.
However, Bitcoin has shown signs of bullishness over the last few days despite the overall downtrend. The cryptocurrency jumped from its $18,980 low and hit a high of $19,700 just yesterday.
Ethereum also jumped from $1,264 to $1,340 against the dollar.
Equities showed bullishness as well this week.
For example, Tuesday's S&P 500 index increased by more than 2%. The tech-heavy Nasdaq followed suit, increasing by similar proportions in the same timeframe and further extending its bullish outlook.
Meanwhile, Meta, Amazon, and Microsoft are at the forefront of bullish rallies. Even the Dow Jones Industrial Average jumped and added 500 more points.
As reported by Santiment, the crypto analysis, and market sentiment tracking platform, some traders and investors in these digital markets may have gotten overexcited at this sudden flash of bullishness in the market.
In their excitement, some of these crypto and equities market members began to spam social media mentions with keywords and hashtags like #bullish, #buying, and #bought.
As expected, the prices of most cryptocurrencies and equities immediately somersaulted, dropping back to previous lows until all the excitement subsided.
According to Santiment, this market excitement was the highest social-media-influenced spike in two months.
Soon after the bullish keywords on social media pushed the sentiment indicator to this two-month high, the cryptocurrency and equities markets turned around and moved in the directions the traders least expected.
Bitcoin, for example, fell by -1.6% and is now worth $19,187 at the time of writing. Ethereum, on the other hand, fell -1.8% and is now worth $1,297.
Disclaimer: The author's comments and recommendations are solely for educational and informative purposes. They do not represent any financial or investment advice. Always DYOR (do your own research)