Crypto bullish chatter on social media has surged to levels that could signal the current market uptrend may be short-lived, according to crypto sentiment platform Santiment.
“Rallies that arrive with a confident crowd tend to fade faster than those climbing a ‘wall of worry’,” Santiment said in a report published on Saturday. “Those climbing skepticism tend to extend,” Santiment added.
Santiment said the ratio of bullish to bearish crypto-related comments on social media is currently around 1.5:1, based on a sample of active crypto accounts tracked across multiple platforms. It comes as Bitcoin (BTC) has increased 11.50% over the past 30 days, trading at $80,628 at the time of publication, according to CoinMarketCap.
A confident market tends to see rallies fade fast
Market participants often watch overall crypto sentiment to gauge whether it may be a good time to buy or sell, or to look for clues about where the market could be headed in the coming weeks.
The Crypto Fear & Greed Index, which tracks overall crypto market sentiment, posted a “Neutral” reading of 47 on Sunday after slipping back into “Fear” territory on Thursday, signaling investors are cautious about the crypto market.
The Crypto Fear & Greed Index fell to a “Fear” reading of 38 on Friday. Source: alternative.me
Santiment said the best scenario for Bitcoin right now is not to break out further. “The team’s ideal setup is a pullback to $75k that flushes late longs, resets sentiment, and builds a healthier base,” the platform said.
Bitcoin supply on exchanges rises
Meanwhile, Santiment pointed to a recent increase in Bitcoin supply on crypto exchanges, potentially signaling that holders are viewing current price levels as an opportunity to take profits.
Related: Strike CEO Jack Mallers dismisses idea that Wall Street threatens Bitcoin
“On-chain activity is broadly quiet, but Bitcoin supply on exchanges has ticked up over the past five days after an extended decline. The reversal could indicate early profit-taking,” Santiment said. Analysts are divided on whether it will fall into that price range or continue higher.
MN Trading Capital founder Michael van de Poppe said he “wouldn’t be surprised that we retest lower at $70-75K before we continue to run.”
Crypto analyst Matthew Hyland said that Bitcoin is “likely” to reach between $87,000 and $95,000 before June.
Magazine: XRP ‘probably going to $12,’ Bitcoin ETFs add $1B: Market Moves
