• Social cues forecast a potential local top formation for cryptos as they have in the past.
  • Elon Musk's appearance on SNL in early May 2021 marked all-time highs for many cryptocurrencies, including Dogecoin.
  • The upcoming Shanghai upgrade is expected to trigger the alt season if the community leans in on the sell-the-news narrative.

The crypto markets, like the traditional finance world, are due to the behavior of thousands, if not millions, of investors making individual decisions. These seemingly unrelated and unconnected decisions, when looked at from a bigger-picture perspective, start to form a pattern. This is the reason why fractals occur in nature, this is the reason why history rhymes and sometimes repeats itself.

Hence, paying close attention to social cues could be a powerful tool in the hands of the right investor. As the second quarter of 2023 kickstarts, certain repetitive behaviors are beginning to resurface that could indicate that a local top for the 2023 bull rally might be around the corner.

The impact of social cues on Crypto

While the crypto market and stock market happen to be starkly different from each other, in some ways, they share a lot of similarities. The changes in prices due to market events are both cyclical in nature, i.e., they follow a pattern of highs and lows and form tops and bottoms over time.

In the case of the crypto market, year to date, digital assets have noted significant increases. Bitcoin price since the beginning of 2023 has risen by over 70%, and Ethereum price similarly over the last three months has increased by 58%. Other altcoins have also noted massive gains, which indicate an active bullish narrative.

However, certain recent events suggest that a top could be forming. 

Social cues that hint at a local top

Over the last few months, the crypto market has noted instances suggesting a local top, such as:-

  • The barrage of celebrity endorsements of cryptocurrencies and service providers. The likes of Matt Damon, Kim Kardashian, Lindsay Lohan, and more promoting crypto over the last year.
  • The recent stunt pulled by Twitter owner Elon Musk who made Dogecoin’s logo the face of the social media portal.
  • Michael Saylor’s MicroStrategy buying $29 million worth of Bitcoin, bringing the total holding to 140,000 BTC.

But this is not the first time this has been observed, as in the past, similar events have occurred that led to the formation of a local top.

  • One of the most notable events was Elon Musk’s appearance on the show Saturday Night Live (SNL) which prompted an exponential rise in crypto assets. Many tokens noted their all-time highs at this point, including Bitcoin, Ethereum, Dogecoin, etc., which still stands as their highest ever.
  • Back in 2017, when the Chicago Mercantile Exchange (CME) launched Bitcoin Futures, BTC formed the local top of $18,600.
  • Similarly, in 2019, when Bakkt started trading Bitcoin Futures, another top was noted.
  • This pattern extends to an altcoin as well since following Ethereum Merge, the ETH price has risen to $1,780.
  • More recently, certain altcoins like IMX and MAGIC noted a surge in social volume following their local tops around mid-March this year.

IMX social sentiment

IMX social sentiment

  • Another such event is the Bitcoin halving which in the past has observed massive interest from investors, leading to a local top. It is next expected to take place in 2024,

What to expect going forward

Although it is premature to predict a local top, investors need to be cautious regardless, as the aforementioned signs are usually signals of a top and can trigger a drop in price at any time. 

As for now, Bitcoin investors need to watch out for a rise to $35,000 and $38,500, as these would mark key levels for taking a profit. At the same time, should corrections arrive and Bitcoin price fall below the key support level of $24,736 to $17,600, selling pressure could rise.

For more information on potential corrections or retracements in the future where investors can accumulate, refer to the article attached below.

Bitcoin Weekly Forecast: Breaking down key BTC levels to accumulate for Q2, 2023

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Recommended content

Recommended Content

Editors’ Picks

New York Attorney General reaches $2 billion settlement with Genesis after claims of fraud

New York Attorney General reaches $2 billion settlement with Genesis after claims of fraud

New York Attorney General Letitia James says her office has secured a $2 billion settlement from Genesis. AG Letitia James sued the crypto company in October on account of lying and defrauding investors of over $1 billion.

More Cryptocurrencies News

Digital asset weekly inflows jump over 600% following response to CPI report

Digital asset weekly inflows jump over 600% following response to CPI report

Coinshares weekly report of digital asset flows shows that crypto assets witnessed more than a 600% increase in net inflows last week after US Consumer Price Index saw a softer-than-expected inflation increase.

More Cryptocurrencies News

Ethereum sees a 16% spike as Bloomberg analysts surprisingly increase approval odds to 75%

Ethereum sees a 16% spike as Bloomberg analysts surprisingly increase approval odds to 75%

Ethereum's (ETH) price gained over 16% on Monday as Bloomberg analysts updated their odds for spot Ethereum ETF approval to 75%. Grayscale’s CEO stepping down from his role days before the Securities & Exchange Commission (SEC) decides on the ETFs has also added complexity to the predictions of analysts.

More Ethereum News

Tokens with high FDVs, low circulating supply face fierce criticism from crypto community

Tokens with high FDVs, low circulating supply face fierce criticism from crypto community

Tokens with high fully-diluted valuations (FDV) have been subject to fierce criticism recently following a series of token unlocks that has caused losses for several investors. As a result, Binance has said in an announcement on Monday that it will give more focus to small and medium-valued crypto projects.

More Cryptocurrencies News

Bitcoin: Is BTC out of the woods? Premium

Bitcoin: Is BTC out of the woods?

Bitcoin price shows signs of continuing its uptrend, providing a buying opportunity between $64,580 to $63,095. On-chain metrics forecast a bullish outlook for BTC ahead. If BTC clears $70,000, the chances of resuming the uptrend would skyrocket.

Read full analysis