Google Searches for 'Bitcoin Price' Reach 7-Month Low
From a contrarian standpoint, low levels of crowd chatter on the Internet may be a sign that bitcoin market sentiment can't get much worse.
Web search data shows the general populace has lost interest in bitcoin thanks to the usually volatile cryptocurrency going silent in recent weeks.
Google Trends, a widely used tool to gauge general interest in trending topics, is currently returning a value of 19 for the worldwide search query "bitcoin price" over the past five years.
That's the lowest reading since December and marks a significant decline from the peak of 86 observed two months ago. Google Trends provides access to a mostly unfiltered sample of actual search requests made to Google and scales their searches on a range of 0 to 100, according to the company.
The cryptocurrency's two-month-long dull price action between $30,000 and $40,000 seems to have driven away retail interest, which surged earlier this year.
Search queries typically rise when the price volatility is high and existing, and potential investors search for information regarding the ongoing bullish/bearish market action.
For example, the Google search value spiked from single digits to over 60 in the three months to early January as bitcoin surged from $10,000 to $40,000. Retail interest dwindled in the following two months when bitcoin was stuck in a $50,000 to $60,000 range. Retail interest rose to new peaks in May as prices began falling.
A rise in the Google search value does not necessarily imply increased buying or selling pressure. Often, investors search for information but don't act. Nevertheless, traders keep an eye on Google search values because peak retail interest, a sign of fear of missing out (FOMO), is often considered a sign of the market nearing a significant top. Similarly, record-low retail queries are taken to represent the lowest point of the bear market.
While the search value has come off significantly from its May peak, it remains slightly above the average value of around 10 observed between May 2018 and September 2020.
Other social measures also point to declining mainstream attention. For instance, the seven-day average of the number of bitcoin mentions on social media, including Telegram, Reddit, Twitter, recently fell to a six-month low of 1445, according to analytics firm Santiment's weekly research note published Monday.
The note added that the average mood of daily bitcoin-related mentions is leaning overwhelmingly bearish. Further, the cryptocurrency's relative social dominance, which compares the number of daily BTC mentions against those of several other top-cap assets, has declined from 80% to 60% in four weeks.
From a contrarian standpoint, declining general interest and bearish mood could be a harbinger of good times.
"Low levels of crowd chatter and a bearish bias may work in the top coin’s favor, signaling undervalued conditions and a potential for short-term recovery," Santiment said. "While historical performance is not indicative of future results, several of bitcoin’s price recoveries in the past two years have coincided with a predominantly bearish sentiment."
At press time, bitcoin was trading near $31,700, down 3.5% on the day, according to CoinDesk 20 data.
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