Crypto’s most hated rallies may have confirmed the bull market 

A new theory goes that the bull market can start once crypto’s most hated projects rally hard


Javen/Shutterstock modified by Blockworks


Crypto markets are notoriously fickle. Round here, fundamentals don’t power prices to the same degree as stocks — valuations instead tend to reflect a sickly mix of vibes, cult of personality, and memes.

Investing in and trading crypto is murky as a result. Active users, fee generation, total value locked or even developer counts are all metrics that should matter. But they really don’t.

Sentiment is king, and high correlation between digital assets means that when things are bad for bitcoin, then the rest of the market almost always suffers.

It’s no wonder, then, that the concept of “hated rallies” has emerged as our current bear cycle shows signs of letting up. The idea is that the more hated the crypto, the more likely it is to pump hard as altcoin season sinks in.

Take Solana (SOL), which has attracted haters from the Vitalik-maxi crowd ever since it was dubbed an “Ethereum killer” sometime around 2018. Like Ethereum, Solana supports apps, NFTs, stablecoins and tokens, but with about 100 times the throughput. 

Crypto purists — eager to hate on Solana — could argue the network is more centralized than Ethereum on account of its lower node count (around 2,900 to 7,700) and supposedly high costs associated with spinning up a validator node.

Bitcoin diehards, on the other hand, would already simply shit on Solana for running an initial coin offering in the first place. (Its delegated-proof-of-stake consensus model doesn’t do it any favors with the Orange Coin crowd, either.)

Solana hate from the Ethereans and Bitcoiners was augmented by even the fringes of the crypto space when FTX went kaput. Now-convicted fraudster Sam Bankman-Fried was one of Solana’s most obnoxious backers, having bankrolled significant chunks of the Solana ecosystem from the ground up.

Crypto markets are proving how thin the line between hate and love

Solana is one of the best performing top-100 cryptocurrencies this year after rallying more than 400%, going from under $10 to more than $56. SOL has more than doubled in the last month alone. 

SOL would still need to multiply three-and-a-half times to hit its all-time high set in 2021. But for all its haters, Solana has easily outstripped the top two: ETH has gained about 70% over the year to date, BTC about 120%.

Other recent “hated rallies” include Terra Luna Classic (LUNC) — the same cryptocurrency at the heart of Do Kwon’s magnanimously flawed algorithmic stablecoin empire. LUNC was good for a 40-plus-percent one-day rally late last week. 

The new edition LUNA token, now spearheaded by the Terra community without Kwon, pushed 73% higher on the same day, while FTT, the once-native token for Bankman-Fried still-bankrupt crypto exchange FTX, doubled. 

Even the floor price for Bored Ape Yacht Club NFTs is up more than 60% since its August lows, going from $37,000 to more than $60,000. For scale, the S&P 500 is up 2% over the same period.

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Does all this mean more haters convert to bigger price pumps? After pulling sentiment readings from data service provider The Tie, I’m not totally convinced.

The Tie recorded long-term negative sentiment for nearly two-thirds of cryptocurrencies in the top 100 by market cap, which aren’t stablecoins, wrapped or otherwise staked tokens. Only about a quarter of those have outperformed bitcoin over the year so far.

East-West connecting Conflux’s 640% jump leads the group alongside Solana, FTT and THORChain, which has quadrupled since January.

At the same time, about a quarter of the top 30 or so cryptocurrencies with positive sentiment at the start of the year have beaten BTC. That includes MakerDAO’s 160% rally and Injective’s monstrous 1,100% push.

(Erik Saberski, vice president of data science at The Tie, told me the long-term sentiment is calculated by collecting Twitter posts about certain cryptocurrencies and measuring how positive or negative they are. It’s a “simple approach commonly referred to as “bag of words,” where each word has a sentiment score: some negative, some positive. The overall tweet is positive if the words on average are positive; the negative if the words on average are negative.”)

The biggest rally came from a crypto with positive sentiment

The data suggests that negative sentiment plagued most top cryptocurrencies at the start of the year, with many flipping positive after bitcoin recovered. All to be expected given how brutal this crypto winter has been. 

Of course, so many cryptocurrencies with negative sentiment this year have rallied hard — but because practically all of them suffered from bad vibes, one shouldn’t read too much into it.

The data does show something of the opposite. There’s correlation between negative sentiment and poor returns: of the 60 non-stablecoin-wrapped-or-staked tokens in the top 100 that have underperformed bitcoin, two-thirds started out the year with negative sentiment. 

ApeCoin, the token meant to one day be the heart of Yuga Labs’ Bored Apes metaverse, is the clearest case, down more than 60% with moderately bad Twitter sentiment. Craig Wright’s BSV — which boasted the most negative sentiment at the start of the year of any cryptocurrency analyzed — is another, having risen only 20% while the rest of the market popped.

So, it could be tempting to base portfolio decisions on how hard haters hate. But it’s probably best to stick to some other tried-and-tested metric — like oh, I don’t know, astrological alignment?

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