The most disliked rebound in the cryptocurrency market has confirmed the arrival of a bull market.

A Strong Bull Market has Been Confirmed Following the Unpopular Rebound in the Crypto Market

Author: David Canellis, translation by: Shanooba, LianGuai

The cryptocurrency market is always unpredictable. In this field, fundamentals do not directly impact prices like stocks do. Instead, valuations often reflect an unsettling atmosphere of personal idolization and a mix of meme concepts.

Because of this, investing in and trading cryptocurrencies becomes murky. Active users, transaction fees generated, total locked value, even the number of developers – these should be important metrics. But in reality, they’re not.

Emotions rule, and the high correlation between digital assets means that when Bitcoin is in trouble, the entire market is almost always affected.

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Therefore, it’s no surprise that the concept of the “hated rally” has emerged during our current bear market cycle, showing signs of slowing down. The idea is that the less loved crypto becomes, the more likely it is to experience significant gains when altcoin season arrives.

Take Solana (SOL) as an example. Since being crowned the “Ethereum killer” around 2018, it has attracted critics from Vitalik enthusiasts. Like Ethereum, Solana supports applications, NFTs, stablecoins, and tokens, but its throughput is about 100 times that of Ethereum.

Crypto purists might argue that due to its lower number of nodes (around 2,900 to 7,700) and the high cost of launching validating nodes, the network is more centralized than Ethereum.

On the other hand, Bitcoin maximalists might dismiss Solana because of its initial token distribution. (Its delegated proof-of-stake consensus model doesn’t favor the orange coin crowd either.)

The hatred towards Solana from Ethereans and Bitcoiners intensified when FTX went bankrupt. Sam Bankman-Fried, the now-convicted scammer, was one of Solana’s most hated supporters. He funded most of the projects in the Solana ecosystem from the beginning.

Solana is one of the best-performing top 100 cryptocurrencies this year, with a gain of over 400%, rising from under $10 to over $56. In just the last month, SOL doubled in price.

To reach its all-time high set in 2021, SOL still needs to triple and a half. But despite having so many haters, Solana easily outperformed the top two contenders: ETH, which has risen about 70% year-to-date, and BTC, which has risen about 120%.

Another recent “hated rally” includes Terra Luna Classic (LUNC) – the same cryptocurrency that belongs to the algorithmic stablecoin empire with insufficient authority. LUNC surged over 40% in just one weekend.

The new version of the LUNA token, driven by the Terra community without Kwon’s involvement, rose by 73% on the same day, while FTX, the cryptocurrency exchange that was once bankrupt, saw its native token FTT double in value.

Even the minimum price of Bored Ape Yacht Club NFTs has increased by 60% since August, from $37,000 to over $60,000. In comparison, the S&P 500 index only rose by 2% during the same period.

Does all of this mean that more haters will cause bigger price fluctuations? After obtaining sentiment readings from data provider The Tie, I’m not entirely convinced.

The Tie’s records show that nearly two-thirds of the top 100 cryptocurrencies by market capitalization have long-term negative sentiment. These cryptocurrencies are not stablecoins, wrapped tokens, or collaterized tokens. So far, only about a quarter of these cryptocurrencies have outperformed Bitcoin.

Conflux, a project that connects the East and the West, has seen its price surge by 640%, tied with Solana, FTT, and THORChain, which have quadrupled in value since January.

Meanwhile, approximately a quarter of the top 30 cryptocurrencies with positive sentiment since the beginning of the year have outperformed Bitcoin. This includes MakerDAO with a 160% increase and Injective with a whopping 1100% growth.

(Erik Saberski, the Vice President of Data Science at The Tie, told me that long-term sentiment is calculated by collecting Twitter posts about certain cryptocurrencies and measuring their positivity or negativity. It’s a simple method of “bagging words,” where each word has a sentiment score: some are negative, some are positive. If the average value of the words is positive, the overall tweet is positive; if the average value of the words is negative, it’s negative.)

The data shows that negative sentiment plagued most popular cryptocurrencies at the beginning of the year, and many of them turned positive after Bitcoin’s recovery. Considering how harsh this crypto winter has been, it was to be expected. Of course, many cryptocurrencies with negative sentiment this year have seen significant increases in value, but we shouldn’t overinterpret it since almost all of these coins were influenced by a negative atmosphere.

The data indeed shows the opposite. There is a correlation between negative sentiment and low returns: two-thirds of the top 60 non-stablecoin, non-wrapped, or non-collaterized tokens among the top 100 cryptocurrencies by market capitalization had negative sentiment at the beginning of the year, underperforming Bitcoin.

ApeCoin, the token that will one day become the core of Yuga Labs’ Bored Apes metaverse, is the most obvious example, with a decrease of over 60% and slightly negative sentiment on Twitter. Craig Wright’s BSV is another example, which had the worst sentiment among any analyzed cryptocurrency at the beginning of the year, with only a 20% increase while the rest of the market was soaring.

Therefore, it may be tempting to make investment portfolio decisions based on the level of hatred haters have for cryptocurrencies. But it’s probably best to stick with other validated indicators – like astrological alignments?

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