Bitcoin posts eighth week of losses, but sentiment indicator points to upward movement

Bitcoin posts eighth week of losses, but sentiment indicator points to upward movement

Sentiment indicators hit a "bottom" Monday, and one prominent fund manager called for retesting 2019 price levels.

Bitcoin recorded its eighth consecutive week of losses for investors for the first time in its history. This was due to weak macroeconomic sentiment, inflation concerns, systemic risks within the crypto industry and a lack of immediate catalysts to drive growth higher.

Prices were at $30,272 late Sunday after falling to $28,700 earlier in the week. Bitcoin last posted a positive week of gains in mid-March, when prices rose from $41,000 to $46,000. It has fallen every week since, dropping nearly 60% from November highs of just over $69,000.

Bitcoin has been weighed down by interest rate hikes in the U.S. and global inflation concerns, and has traded much like a risky tech stock in recent months.

Data from the on-chain analytics tool Sentiment suggests bitcoin prices are finding a bottom at current levels and could rise in the coming weeks.

The company's Weighed Sentiment tool - which calculates positive and negative comments about an asset on social media - suggests that public sentiment for bitcoin has reached levels last seen on "Black Thursday."

Historically, prices are more likely to rise when sentiment reaches low levels, the company said. The data shows that bitcoin prices have risen in three of the last four instances when the indicator has reached a similar level.

Recession fears have contributed to a slump in the bitcoin price in recent months.

In April, Goldman Sachs analysts stated in a note that the Federal Reserve's aggressive measures to control inflation could lead to a recession. The bank put the likelihood of an economic contraction - a phase of the business cycle in which the economy as a whole contracts - at about 35% over the next two years, according to reports.

Some analysts pointed out that institutional investors have been pulling more money out of the ecosystem than putting it in - suggesting a generally pessimistic mood that may also have contributed to falling prices.

"CoinShares data for last week showed a record weekly outflow of institutional investors from crypto funds year-to-date," FxPro market analyst Alex Kuptsikevich told CoinDesk in an email. "Funds are acting cautiously, and their actions may slow growth while buying on the dips comes from retailers and crypto kits."

The market is distilled by sporadic participants who want to "ride the wave" but are not crypto enthusiasts by nature," Kuptsikevich added.