Crypto Traders Are Bullish On Bitcoin – Potential Trouble Ahead?
At the moment of writing this article, Bitcoin is trading in the red and the king coin is priced at $9,504.54.
Following the halving, there were expected some more significant moves with the price of Bitcoin, but despite the fact that the king coin has tested and re-tested the important level of $10k, it seems that the crypto is not ready yet to break this level.
The $10k level is known to be a massive FOMO-triggering level.
Bullish Bitcoin sentiment among traders
Recent analysis suggests sentiment among Bitcoin traders is at highs that have not been witnessed in two years.
According to the digital asset analytics platform, The Tie crypto investors quickly became bullish on BTC after the big crash from back in March.
As you know, on March 12, Bitcoin’s price fell below $4,000, but the king coin managed to bounce back amazingly.
“Bitcoin’s sentiment (30-day average) is the highest that we have recorded since 2017. 30-day average tweet volumes on Bitcoin are also at 2020 highs,” the platform mentioned above notes.
At times, collective herd mentality can be a counter indicator
This might look like amazing news for the king coin, but as the online publication, the Daily Hodl noted, sometimes the collective herd mentality of crypto traders served as a counter indicator.
Such bullish sentiments were followed by massive drops in the price of BTC.
The same online publication notes that the creators of the Fear and Greed Index from Alternative.me are addressing the phenomenon and say that this is a core manifestation of human psychology.
“The crypto market behavior is very emotional. People tend to get greedy when the market is rising, which results in FOMO (fear of missing out). Also, people often sell their coins in the irrational reaction of seeing red numbers…” according to the official notes.
The continued and said that “Extreme fear can be a sign that investors are too worried. That could be a buying opportunity. When investors are getting too greedy, that means the market is due for a correction.”
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CoinMarketCap is a website that provides cryptocurrency market cap rankings, charts, and more. It was purchased by Binance for $400M in 2020.
Andreas Townsend Author
I am a technical writer, author and blogger since 2005. An industry watcher that stays on top of the latest features, extremely passionate about finance news and everything related to crypto.