Sentiment
Padtai - Sentiment Bubble & Sentiment Graph playbook
🫧 Sentiment Bubble
Look for contrarian signals between price movement and sentiment shifts.
📉 If the price drops by X% but sentiment flips from Bearish → Bullish, consider Going Long.
📈 If the price rises by X% but sentiment flips from Bullish → Bearish, consider Going Short.
After landing on this menu, you’ll notice the big bubbles — in this case, $TRX, $BTC, and $TRUMP. For this example, we’ll focus on a trade involving $TRUMP
After spotting $TRUMP as a big bubble, we notice that the price is down 10%, but the sentiment is showing bullish. That gives us a buy-side bias — we’re looking for potential buying opportunities here.
You can adapt this into your own trade setup.
For example, we wait for the Stochastic to cross upward on the 1-hour timeframe. Then, using sentiment as confirmation, we place the stop-loss below the previous low, and set the take-profit at the EMA 12 (the red line).
Once the conditions are met, we enter the trade. In this case, it turned out to be a winning trade with a 3:1 risk-to-reward ratio.
That means: If you risked $1,000 on this setup (using 90x leverage, based on a stop-loss of ~1.2%), a loss would cost you $1,000 — but a win would return $3,000. And this trade won.
📊 Sentiment Graph
Crypto Sentiment
Tool by Padt.ai aggregates market perspectives, including Positive, Negative, and Neutral views, and calculates the Net Sentiment by offsetting these values, resulting in a positive or negative score (+ or -).
*Additionally, there are significant threshold levels
set at sentiment -30 and -50, represented by a dashed yellow line and a dashed green line, respectively.
⚐ Buy Signal: Example of the BTC/USD pair
Strategy 1: Buy with the marked levels
We can see that even during a sideway down market, where BTC traded between $70,000 and $54,000, buying when the market sentiment dropped below the green and yellow lines would have allowed us to purchase Bitcoin at $58,000, $56,000, $54,000, and $56,000
—a total of four times before BTC broke out of this range and later surged to $100K.
⚐ Missing out? Didn’t catch it at the dashed lines? Don’t worry, we’ve got you covered!
Strategy 2: In a bull market, buy when sentiment shifts from red to green.
Aside from waiting for sentiment to reach our threshold level, we can buy more frequently by simply waiting for sentiment to turn from red to green (from negative to positive).
This signals that people in the market are starting to believe in a recovery for some reason, eventually it becomes a self-fulfilling prophecy, leading to market growth.
Even though sometimes this method may not give us the best entry points in a downtrend or a long sideway market, in a bull market, it's almost always a **great entry point to ride the short or medium-term price movements for profits. ***In a bear market, you can also use the signal of sentiment turning from green to red as an entry point for a short position.
⚐ Is the market overheating? Find your selling or hedging point in a bull market!
When the market is surging and sentiment becomes significantly more positive compared to previous sentiment candles, it indicates that we are likely in a euphoric stage. After this, the market often experiences stagnation (sideways price movement) or sometimes a dip in prices.
If you’re holding a BTC/USD position, you might consider hedging your position or selling some of your speculative Bitcoin to lock in profits.
Alternatively, it could be a good strategy to wait for the dip that usually follows, allowing you to buy at a better price for your satoshis.
⚐ Let's Apply These Strategies to Altcoins
Mid-cap (TON)
Sentiment peaked at a price of $7, then became sideways before dipping.
When sentiment shifted from red to green, We entered the position at $4.8. The price then rose until sentiment peaked again around $6. We exited the position at $5.8, making a +21% profit from this trade.
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