On September 27, bitcoin (BTC) reclaimed a trading price of $66,500 for the first time since late July. This surge was accompanied by bullish sentiments from many investors.
Instead of going higher, the leading crypto asset has tanked below $64,000 at press time. Blockchain market intelligence platform Santiment shares insight into a possible reason behind Bitcoin’s failure to unlock higher prices.
What Could Drive Bitcoin’s New ATH?
The chart below shows the rapid surge in positive commentary towards BTC after the asset unlocked a local high of $66,500. Santiment’s research showed that there were 1.8 bullish BTC posts for every 1 bearish. Most of these bullish comments leaned on the possibility of Bitcoin reaching the $70,000 price mark.
According to Santiment, however, bitcoin could unlock the $70,000 mark if “the crowd slows down their expectations.” The market intelligence firm added that market charts often move in the opposite direction from the crowd’s expectations. This implies that the market performance could turn green if most crypto participants leaned more toward a bearish outlook on BTC price movement.
BTC Drops Below $64K
After a weekend of a bullish green chart, the leading cryptocurrency has taken a downturn and is currently trading at $63,500. Earlier today, it sunk to $63,250, the lowest in the past four days.
Although no singular factor can be pinpointed as the driver behind Bitcoin’s sudden price correction, an earlier CryptoPotato report hints that the upcoming speech from the Federal Reserve’s chair, Jerome Powell, may have contributed to the asset’s price movement.
Earlier this month, the Fed downsized its interest rate to a range between 4.75% and 5%. Later today, Powell is expected to discuss the interest rate cut in more detail.
Final Thoughts
Bitcoin’s recent surge to $66,500, followed by a sharp decline below $64,000, highlights the volatility that often defines the cryptocurrency market. While the initial rise sparked bullish sentiments, with many investors predicting a new all-time high of $70,000, market intelligence from Santiment suggests that overly optimistic sentiment may have contributed to the downturn.
This theory is based on the idea that when the majority of the market leans heavily towards a bullish outlook, the price often moves in the opposite direction, reinforcing the unpredictability of price trends.
Despite this enthusiasm, Bitcoin’s drop could also be influenced by macroeconomic factors, such as the Federal Reserve’s upcoming statements and interest rate adjustments. These external factors tend to influence market sentiment, driving both institutional and retail investors to act cautiously.
As a result, Bitcoin’s short-term performance may continue to fluctuate, depending on both crowd sentiment and the broader economic environment. While the potential for a rebound remains, it will likely depend on a more tempered market outlook and less speculative behavior.
Article Source: CryptoPotato
