Signs of Greed and Fear for the Final Third of the Year

It's that time of year again, folks. And I don't mean September... It's the latest concerning dip that appears to be designed to shake out weak hands. Or maybe this one is legitimate and $40K Bitcoin is right around the corner again? We'll save the analysis on that for another day.

For this round, though, we'll be taking a quick look at how the crowd is reacting to crypto's latest slide that resulted in BTC retracing back to $55.5K and ETH back to $2.3K. The best signal for a rebound would be a high level of crowd fear without a lot of optimism that these prices are for "buying the dip".

For starters, we can simply take a look at a longer term crowd indicator, which is the amount of mentions of crypto being in a "bear market". Sure enough, we can see the red line in the chart below (representing social dominance for this topic) spiking in just the past couple hours. In fact, this is the highest spike in crowd bear market discussions since the much larger August 4th and 5th crash.

Good sign #1:

On the other hand, there was also a slight rise in "bull market" and other positive keywords as well. This was especially true as traders were getting confident in a rebound right before BTC pulled back on a disappointing Tuesday.

Neutral Sign #1:

So what about actual mentions from the crowd about "buying the dip"? Surely, this slide is enough to really increase discussions about the latest dip buy opportunity, and the prospects of scooping up crypto at these cheaper levels? Well, not really at all actually. Unlike the huge levels of enthusiasm around the July 4th and August 4th dips, the crowd's voice are mostly muffled this time around.

Good sign #2:

Want another solid way to track the crowd's mood? Why not look at some lower round number BTC target mentions vs. some higher round numbers? As you would expect, mentions of $70K-$75K price levels are generally a sign of traders targeting these as sell targets (a sign of greed). On the other hand $40K-$45K levels consistently are a sign of fear.

We want to see big increases in that $40K-$45K range as a signal that traders are getting fearful on this dip. But instead... we're not really seeing much of anything on either end. It's almost like it's a ghost town at the moment, and traders may be showing hints that their fear won't truly creep in until BTC potentially approaches the $50K level it dipped to a month ago.

Neutral Sign #2:

And last but not least, we can always look at the overall crowd interest in highly speculative, ultra volatile "meme coins". A low level means that they are an afterthought at the moment, indicating a healthy amount of fear. A high level means traders are trying to load up expecting DOGE, BONK, WIF and others to rebound nicely in the near future.

There is a very mild rise we saw recently, but we could hardly call this a spike in enthusiasm at the moment. In fact, as we can see, meme coins are being discussed at a much smaller level compared to the March and April craze, or even the brief rebound in June. So, at the very least, traders aren't greedy at the moment. But the slight rise in the past 24 hours indicates there is at least a small rise in interest in these assets.

Neutral Sign #3:

So with the understanding that we are just looking at the tip of the iceberg as far as possible social "greed/fear" related queries go, we can at least say this small sample size shows we are probably a bit closer to a bottom than a top.

Crypto prices will always have some sway from how the crowd perceives what is coming next. And in most cases, historically, expect that markets will continue to move the opposite direction of the crowd's expectations. So with that said, what are yours?

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Disclaimer: The opinions expressed in the post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.