Over the past two to three days, positive sentiment across the Bitcoin market suddenly surged to a level not seen in more than a year. While this may seem like a bullish sign, analysts have warned that it is concerning.
According to a tweet by the market intelligence platform Santiment, the sudden optimism from the crypto community has increased positive Bitcoin comments on social media so much that they are now more than double the number of negative ones for the first time in a year.
Positive Bitcoin Comments Suddenly Rises
The high positive commentary has also driven the fear of missing out (FOMO) to more intense levels where crypto prices usually experience brief surges.
Santiment said bitcoin (BTC) would start testing its March all-time high levels when traders and the crypto community start slowing down and expressing fear, uncertainty, and doubt (FUD) again. Until then, the market would remain risky and highly volatile.
The market intelligence firm also noted that the sudden optimism began about three days ago. Before that, the market was saturated with negative sentiment and speculations about BTC plunging further to the $40,000-$45,000 levels.
Blockchain analytics firm IntoTheBlock revealed at the time that BTC had no significant bullish momentum and that investor interest was fading. The challenging macroeconomic conditions and slowing crypto adoption raised questions about the market being at the onset of a bear phase or a quiet period during this bull run.
In fact, CryptoQuant’s Bull-Bear Market Cycle indicator has been in the bear phase since August 27, suggesting that BTC faces the risk of further correction in the near term.
Investor Behavior Still Fearful
While market sentiment hovers between the positive and negative, the Crypto Fear and Greed Index shows that investors are predominantly in the fear zone. Data from Alternative.me shows the index is at 32, which indicates fear. Last week, the value was 22, revealing extreme fear.
The Fear and Greed index determines investor behavior by considering several factors, including social media, volatility, market momentum, and trends. The index postulates that investors tend to get greedy when the market is surging and become fearful and sell their assets when it is in a downward trend.