Bitcoin Topped Out As Hype Around The Coin Shot Up

According to data from the analytics firm Santiment, crowd sentiment around BTC has noted a sharp surge recently. The indicator of relevance here is the “Positive vs. Negative Sentiment Ratio,” which keeps track of the difference between the positive and negative comments related to Bitcoin that are being made on social media platforms.

The indicator separates posts related to negative and positive sentiments by putting them through a machine-learning model devised by the analytics firm.

When the value of this metric is greater than 0, it means the social media users are participating in more positive talks than negative ones. On the other hand, it being under this threshold suggests the dominance of bearish sentiment on these platforms.

Now, here is a chart that shows what the Positive vs. Negative Sentiment Ratio’s recent trajectory has been like:

As displayed in the above graph, the Bitcoin Positive vs. Negative Sentiment Ratio had observed a significant surge during the cryptocurrency’s earlier run toward the $66,000 level.

Yesterday, when Santiment shared the post, social media users made 1.8 bullish posts for every 1 bearish post. Thus, the traders had become quite optimistic after the price surge. This, however, may not have been an ideal development for the coin.

Historically, BTC has tended to move in the direction opposite to what the crowd is expecting, with the probability of a contrary move only rising the more lopsided the sentiment gets.

Today, Bitcoin has retraced back under the $64,000 level, a possible indication that the earlier hype that the social media users had shown has backfired, just like it has done many times.

It’s also not just the social media users that have been excited recently, as the Fear & Greed Index, an indicator created by Alternative that considers more factors than just social media, has also been showing a rising optimism in the sector.

The Fear & Greed Index currently sits at a value of 61, which suggests that the investors are leaning towards being bullish around Bitcoin and the cryptocurrency sector in general.

The sentiment-related indicators could follow in the coming days, as they may dictate whether BTC can regain its bullish momentum. The crowd calming down would be a sign in the right direction if history is to go by.

BTC Price

After the latest plunge, Bitcoin has returned to the $63,400 level.

Bitcoin Sentiment Ratio Has Spiked, But Value Still Not Too High

According to data from the analytics firm Santiment, Bitcoin Fear Of Missing Out (FOMO) has remained low through the latest rally. The indicator of relevance here is the “Positive Sentiment vs. Negative Sentiment Ratio,” which, as its name suggests, measures the ratio between the positive and negative comments around BTC being made on the major social media platforms.

To separate the posts/threads/messages on these platforms between positive and negative, Santiment’s indicator uses a machine-learning model.

When the value of this metric is greater than 1, it means the social media users are making more posts expressing a positive sentiment than a negative one. On the other hand, it being under 1 suggests bearish messages are the norm on these platforms.

Now, here is a chart that shows the trend in the Bitcoin Positive Sentiment vs. Negative Sentiment Ratio over the last few months:

As the above graph shows, this Bitcoin indicator has observed an uplift alongside the latest recovery run in the cryptocurrency’s price. This rally has come as the US Federal Reserve has announced an interest rate cut.

The indicator is currently decently above the neutral mark, meaning that positive posts notably outweigh the negative ones. Historically, the asset has tended to move in a direction opposite to what the crowd is expecting, with the probability of the contrary move going up the stronger this expectation becomes.

A very bullish market can be a warning sign for the BTC price. Despite the recent surge in sentiment, FOMO is not yet at a level where it would be a problem.

The chart shows that the previous spikes in the indicator that occurred around the tops for Bitcoin were of a significantly large scale. The last few months have also seen the indicator generally maintain a positive level, so the metric’s current value isn’t even that out of place when compared to the norm.

“Markets can roll until we see a bullish sentiment spike similar to what we saw during the April 19th and May 21st tops,” notes the analytics firm. If FOMO does end up spiking to high levels in the coming days, BTC could encounter another top.

When that happens, another foray into the negative sentiment zone could be to wait since, as highlighted in the graph, the last two such instances proved to be profitable buying points into Bitcoin.

BTC Price

Bitcoin has enjoyed a surge of almost 6% over the past week, bringing its price back to the $63,200 mark.