Skip to content
- Bitcoin rebounded to $84.5K after panic-driven predictions of a deeper drop at $78K failed to materialize.
- Extreme fear and optimism often trigger Bitcoin reversals, as market sentiment moves opposite to expectations.
- Social sentiment data shows traders expecting $100K+ often signal corrections, not continued rallies.
Bitcoin bounced back to the $84,500 mark on Friday, disregarding bearish outlook for further downtrend. This came after many analysts termed the cryptocurrency decline to $78 K as a signal of a deeper plunge in the future. As reported by the analytical platform Santiment, this is usually the situation when traders panic. Fear emerged and social networks filled with expectations of a drop in prices. However, Bitcoin recovered in the same manner it has several times this year.
Bitcoin Price Fluctuations Within Range
A similar tendency was observed in February when several traders thought that the BTC price would fall even lower. Within this context, instead of continuing to decline, prices increased in early March, which is actually one of the signals that market sentiment gives, contrary to expectations. For the last 30 days, the price of Bitcoin has been floating in the range of $70,000 to $ 100,000. Although it has greatly fluctuated in price it has not dropped to touching the support, or gone above the resistance levels.
These sentiments are indicative of the market sentiment and tends to influence Bitcoin’s movement. On average, the more the social sentiment is geared towards the negative side of fear, the more the prices bounce back. On the other hand, when optimism and excitement kick-in, a pullback is usually experienced. Those still waiting for a BTC price to go below $70K are usually caught up to FUD as this has always indicated bottoms traditionally.
Moreover, the platform also noted that high levels of optimism are possible only at the price of it becoming pathological. Whenever traders anticipate the Bitcoin value break the $100k ceiling, it could signal a pullback is approaching. These expectations, which are characterized by groups of high expectations, are indicative of over-optimism in the markets. If many people predicted that many would go up, the market will go down instead.
Over-Optimism Signals Pullback
Santiment focuses on quantity groups of forecasts as a means of gauging social data analysis. While the expectations are that Bitcoin will trade within the $10K and $69K range as seen by traders, the signal has often pointed to a buy. However, when the predictions are in the $100, K – $159, K range, the subsequent correction takes place. This makes it possible to conclude that emotions often are a key factor behind immediate Bitcoin’s dynamics.
Bitcoin remains in a position and once again proving that the price fluctuations depend on the market trends. Contrarians who have traded through noise have learnt that this can be very rewarding in volatile market. Those that purchased towards the end of the downtrend at $78K had their investment bounce back when Bitcoin recovered within the next few days.
