In the last few days, there has been a sudden spike in positive sentiment across the Bitcoin market, reaching levels not seen in over a year. While this may initially appear bullish, analysts caution that it could be problematic.
A tweet from market intelligence platform Santiment noted that the crypto community’s optimism has surged so much that positive comments on Bitcoin have now more than doubled negative ones for the first time in a year.
Bitcoin Comments Surge
This heightened positive sentiment has also intensified the fear of missing out (FOMO), leading to brief price surges. However, Santiment warned that Bitcoin (BTC) would likely start testing its March all-time high levels only once traders and the broader crypto community revert to expressing fear, uncertainty, and doubt (FUD). Until then, the market remains risky and highly volatile.
The optimism reportedly began around three days ago, after a prolonged period of negative sentiment. Previously, there was widespread speculation about BTC potentially dipping further to the $40,000-$45,000 range.
At the time, blockchain analytics firm IntoTheBlock noted that BTC had no significant bullish momentum, and investor interest was waning. Broader macroeconomic challenges and slowing crypto adoption raised concerns that the market might be entering a bear phase or was in a quiet phase of the ongoing bull run.
In fact, CryptoQuant’s Bull-Bear Market Cycle indicator has been in a bear phase since August 27, signaling the possibility of further corrections in the near term.
Investors Remain Cautious
Despite fluctuating market sentiment, the Crypto Fear and Greed Index shows that investors remain largely fearful. Data from Alternative.me places the index at 32, reflecting fear. A week earlier, the index was at 22, which indicated extreme fear.
The Fear and Greed Index assesses investor sentiment by analyzing various factors, including social media, market trends, and volatility. The index suggests that when markets surge, investors often become greedy, while in downturns, they become fearful and sell off assets.
The article “Positive Bitcoin Sentiment Surges to Yearly Highs: Here’s Why That’s Bad for BTC” originally appeared on CryptoPotato.
