Bitcoin’s sharp price rise has triggered overwhelmingly bullish sentiment on social media, raising concerns of a potential short-term correction. Blockchain analytics firm Santiment warns that such excessive optimism often precedes a slowdown, with analysts suggesting Bitcoin could retest the $70,000 to $75,000 range. Despite trading near $81,000, data shows an increase in Bitcoin held on exchanges, hinting some investors may be preparing to sell.
Bitcoin price sentiment across cryptocurrency social media has become very positive, according to blockchain data provider Santiment. The company stated that this rising positive sentiment may actually suggest an impending slowdown or correction.
According to a Santiment report published last Saturday, market rallies driven by overly optimistic sentiment tend to die out quickly. The platform stated that markets tend to do well whenever investors act with caution.
Positive sentiment on cryptocurrencies now leads negative sentiment by a 1.5-to-1 ratio on major social networks. This surge accompanies Bitcoin rising 11.5% over the last 30 days to trade at $80,858 according to market data.
Santiment further opined that a correction could help Bitcoin establish a solid base for another push higher. The firm believes a drop to $75,000 could remove overly optimistic investors.
Analytics also show a recent rise in the number of Bitcoins stored on crypto exchanges. This contrasts with a prolonged trend of decreasing exchange supplies, which typically indicates funds moving to cold wallets.
According to Santiment, this latest rise could indicate some investors plan to cash in their gains. It explained that blockchain activity still seems subdued despite the BTC price resurgence.
Analyst Michael van de Poppe, founder of MN Trading Capital, stated he wouldn’t be surprised to see Bitcoin trade within the $70,000-$75,000 bracket before moving upward. Cryptocurrency analyst Matthew Hyland said Bitcoin could still rise to $87,000-$95,000 before June.
