Positive Bitcoin Sentiment Rises to Annual Highs: Here’s Why That’s Bad for BTC

Over the past two or three days, positive sentiment in the Bitcoin market has suddenly risen to levels not seen in more than a year. While this may sound like a cruel sign, analysts warn that it is serious.

According to a tweet by market intelligence platform Sentiment, the sudden optimism from the crypto community has boosted positive Bitcoin comments on social media to the point that they have now more than doubled the negative number for the first time in a year.

Positive Bitcoin comments suddenly arise

The overwhelmingly positive sentiment has also driven fear of missing out (FOMO) to extreme levels where crypto prices often see brief spikes.

Sentiment said Bitcoin (BTC) will begin testing its March all-time high as traders and the crypto community begin to slow down and redefine fear, uncertainty and doubt (FUD). Until then, the market remains risky and highly volatile.

The market intelligence firm also pointed out that the sudden optimism started three days ago. Prior to that, the market was full of negative sentiments and speculations about BTC falling further to $40,000-$45,000 levels.

Blockchain analytics firm IntoTheBlock noted that BTC had no significant bullish momentum at the time and investor interest was fading. Challenging macroeconomic conditions and a slowdown in crypto adoption have raised questions about whether the market is at the beginning 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 is at risk of further correction in the near future.

Investor behavior is still scary.

While market sentiment hovers between positive and negative, the Crypto Fear and Greed Index shows that investors are mostly in the fear zone. The index from Alternative.me shows it's at 32, indicating fear. Last week the value was 22 which indicates high fear.

The Fear and Greed Index determines investor behavior by taking into account a number of factors including social media, volatility, market momentum and trends. The index shows that investors become greedy and fearful when the market is rising and sell when their assets are low.

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