The past ten days or so went quite positively for bitcoin as the asset added almost ten grand within this timeframe, mostly fueled by the US Federal Reserve's decision to reduce the key interest rates.
Bitcoin’s price has stalled after a recent rally, sparked by the US Federal Reserve’s decision to lower interest rates. While the asset gained a substantial 9 grand over the past ten days, some social metrics indicate that the cryptocurrency’s run might be coming to an end – at least in the short term.
After the US CPI numbers came out last Wednesday and caused bitcoin’s price to drop hard, the asset found itself at $55,500. However, it began an offensive in the following days as speculation about the Fed’s next move continued to grow.
A week later, the US central bank decided to pivot from its four-year monetary strategy and lower interest rates, following the lead of the ECB, the Bank of Canada, and the Bank of England.
After the inevitable immediate volatility for BTC and other markets, the cryptocurrency reacted well and gained almost 5 grand in a matter of days, rising from $59,500 to a three-week peak of $64,000. However, its rally has now stalled, and the asset trades just under $63,000.
According to data from Santiment, this cooldown could be followed by an even steeper retracement due to interactions on social media. This week, FOMO (Fear of Missing Out) levels skyrocketed to the fourth highest since the beginning of the year. Usually, such rapid increases are followed by corrections, as occurred after the ATH in March and the rallies in early June and late July.
With a very bullish week of crypto transitioning into weekend mode, @santimentfeed has picked up a very bullish crowd sentiment spike. Understandably, the crowd has reason to be optimistic about Bitcoin & others continuing to rise after the Fed’s first rate cuts in 4.5 years.
Santiment noted that the crypto market is especially prone to such reactions and usually tends to move in the opposite direction.
Back to Neutral
The Fear and Greed Index, which gauges different information like social media interactions, price movements, surveys, etc, to determine the current sentiment toward the industry, has risen by 21 points in the past few days.
It was back in a ‘fear’ state (33) on September 17 (the day before the rate cuts) but has risen to a multi-week peak of 54 (neutral). Recall that the last time the index rose so quickly to such a level, BTC’s price tanked from $65,000 to below $52,000 in a matter of weeks.
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