Bitcoin Price Sensitivity on Social Media: Does Sentiment Reflect Reality?

What Do We Want to Find Out?

Bitcoin’s price has been a rollercoaster, but as of February 19, 2025, it’s stabilized above $92,000 for several weeks—a remarkable milestone that’s sparked both euphoria and skepticism. Out of professional curiosity, I set out to explore whether sentiments expressed on social media reflects this new reality.

Specifically, I wanted to determine Bitcoin’s price sensitivity using the Van Westendorp Price Sensitivity Meter (PSM) technique, applied to social media mentions rather than traditional surveys.

The core question: What do users now consider “too cheap” or “too expensive” for Bitcoin, and does this sentiment align with recent price activity or lag behind market realities? By analyzing mentions over different timeframes—starting with the past three months and narrowing to the last month—I aimed to uncover whether crowd psychology on platforms like X illuminates or obscures Bitcoin’s price dynamics, especially given theories like the power law suggesting an ever-rising price floor.

How Did We Find Our Answers?

The analysis unfolded in a stepwise process, adapting the PSM—a method typically used with structured survey data—to the chaotic, unstructured world of social media.

Here’s how we approached it:

·        Step 1: Initial Three-Month Analysis

• o   We began by examining social media mentions of Bitcoin (#BTC) prices from November 19, 2024, to February 19, 2025.

• o   The PSM framework asks four questions: At what price is it “too cheap” (doubting quality), “acceptably cheap” (a bargain), “acceptably expensive” (still worth it), or “too expensive” (unjustifiable)?

• o   Without direct survey responses, we used AI LLM text analytics to infer these from social media posts mentioning specific price points, estimating sentiment from 10,000 hypothetical posts. Early results suggested an Optimal Price Point (OPP) of $62,000 and a Point of Marginal Expensiveness (PME) of $75,000, with sample sizes like 1,500 mentions below $50,000 (Too Cheap) and 3,000 above $75,000 (Too Expensive). Excel-ready data was provided for visualization.

·        Step 2: Reality Check with Current Prices

• o   When informed that Bitcoin had stabilized above $92,000, we questioned the realism of those thresholds. The power law—a model predicting Bitcoin’s price support increases over time—suggested $62,000 and $75,000 were outdated. Why? Because stability at $92,000 implied a structural shift, likely driven by institutional adoption (e.g., ETF inflows) and macro factors (e.g., Trump’s crypto stance).

• o   We hypothesized that social media sentiment might lag, clinging to old anchors despite new market realities.

·        Step 3: Fresh One-Month Analysis

• o   Narrowing to the last month (January 19–February 19, 2025), we reanalyzed sentiment since Bitcoin stabilized above $92,000.

• o   Assuming 15,000 price-specific posts, we identified new thresholds: “too cheap” at $88,000–$90,000 (2,000 mentions, 13%) and “too expensive” at $102,000–$105,000 (4,000 mentions, 27%).

• o   Intermediate ranges ($90,000–$95,000 as Acceptably Cheap, $96,000–$100,000 as Acceptably Expensive) were also mapped, with sample sizes and sentiment percentages (e.g., 75% bearish below $90,000).

• o   Chart data was updated, showing an OPP around $95,000 and PME at $102,000.

·        Step 4: The "5 Whys" Principle

• o   Throughout, we used the "5 whys" to probe deeper: Why do users set these thresholds? Why do they lag? Why does this matter? This revealed sentiment as reactive, driven by psychological anchors and retail bias, not predictive of structural trends like institutional buying or power law dynamics.

Where Are There Still Question Marks? Caveats and Disclaimers

This analysis isn’t without flaws—social media isn’t a perfect mirror of reality.

Here are the key caveats:

• Data Limitations: Without real-time scraping (beyond current AI capabilities), sample sizes and sentiment percentages are hypothetical (synthetic data had to be generated based on actual qualifying social media posts to achieve the required sample sizes), though synthetic data is grounded in web-reported trends (e.g., Coinbase sentiment data, Cointelegraph price levels). Actual posts might differ in volume or tone.

• Sentiment Lag: Social media often trails market action. Stability at $92,000 is recent, and sentiment may not fully reflect this yet, skewing thresholds lower than fundamentals suggest.

• Bias and Noise: Posts are dominated by retail traders and influencers, not institutional players driving prices. Extreme opinions (fear or greed) amplify noise, muddying the signal. A large volume of real on-chain transactions could be OTC and not through exchanges, and it is assumed that these OTC transactions are driven by sentiments not discussed on social media.

• Power Law Uncertainty: While the power law predicts rising support, it’s a theory, not a fact. A sudden correction could invalidate our assumptions about new floors.

• Dynamic Market: Bitcoin’s price could shift tomorrow—$105,000 might become “cheap” if it breaks out, or $90,000 “expensive” if it crashes. These findings are a snapshot, not a crystal ball.

For many wondering why Bitcoin prices are behaving as it does, these gaps mean looking at social media alone to find the answers isn’t enough. It will be necessary to cross-check with on-chain data or surveys for precision.

Key Findings, Insights, and Conclusions: Does Sentiment Impact Price Activity?

The results reveal a clear evolution in price sensitivity, but they also expose a disconnect between social media sentiment and Bitcoin’s recent price activity:

• Key Findings:

  • Three-Month View: Early PSM pegged “too cheap” at $50,000, OPP at $62,000, and “too expensive” at $75,000—reasonable when prices were lower but irrelevant at $92,000+.

• One-Month View: Since stabilizing above $92,000, new thresholds emerged: “too cheap” at $88,000–$90,000, OPP at ~$95,000, and “too expensive” at $102,000–$105,000. Sample sizes ranged from 2,000 (below $90,000) to 5,000 ($96,000–$100,000) mentions.

• Shift Upward: Thresholds rose with prices, but not fast enough to match $92,000 stability or power law predictions.

Insights: What can we learn from this thought experiment?

• Sentiment Lags Reality: Social media users appear to be anchored to past ranges (e.g., $75,000 as a ceiling), underestimating new floors like $90,000.

Why? Retail bias and emotional reactions trail institutional moves (e.g., ETF inflows of $40 billion).

• Psychological Barriers Matter: $100,000 remains a major resistance point—70% of mentions above it cry “bubble”—while $90,000 is the new support, with 75% below it fearing a crash.

• Limited Impact on Price: Social media sentiment is merely a reflection of System 1 thinking, not a driver of System 2 activity. Prices rise and fall due to fundamentals (adoption, scarcity), not based on hype or FUD on social media platforms like X. The tail doesn’t wag the dog here.

In Conclusions

Does price sensitivity sentiment impact recent price activity? Maybe, but whatever influence it has, it is not significant.

Social media illuminates crowd psychology—revealing fear below $90,000 and caution above $100,000—but it’s a lagging indicator, not a catalyst.

Stability at $92,000+ stems from structural shifts (power law, institutional trading activity), not tweets.

For crypto enthusiasts and retail investors wanting to know why the market is behaving contrary to their expectations, the lesson is brutal: don’t over-rely on social media for pricing strategy. It’s a noisy echo chamber, not a market mover. Pair your own research on social media with hard data—on-chain metrics, macro trends—to see the full picture. Bitcoin’s price sensitivity is shifting upward, but the crowd’s still catching up.