In recent weeks, bitcoin Sentiment has been most bullish when the price was highest and most bearish exactly when it was most stressed, according to Santiment data spanning May 21 to June 4.
The peak of optimism came on May 22, with bitcoin near its high of $78,000 for the period. The most bearish moment occurred on June 3, with bitcoin near the minimum. While sentiment is not a timing tool, maximum conviction at highs and maximum fear at lows are the inverse of what the trade typically returns.
Bitcoin was recently trading near $62,400, down about 20% from the late May peak. The risk outlook has cracked on its side.
Investments in artificial intelligence (AI) companies that drove global stocks to record highs this year have stalled after Broadcom’s chip forecast missed expectations. South Korea’s KOSPI index fell 4.7%, and the won and Indonesian rupiah are at multi-year lows as capital flees emerging Asia.
U.S. spot bitcoin ETFs on Thursday ended a 13-day outflow streak of $4.4 billion with a small inflow of $3.05 million. Spot ether ETFs ended their 17-session parallel streak at $19.30 million on the same day. Both numbers are too small relative to the streaks they ended to call it a regime change.
The US Nonfarm Payrolls report on Friday at 8:30 am ET is the binary catalyst. A soft data rekindles expectations of a Federal Reserve interest rate cut under new Chairman Kevin Warsh and will likely send risk assets back up, while a positive data may extend the easing.
And keep an eye on how bitcoin performs at the $60,000 round number if it is tested before the data arrives. Stay alert!
Read more: For an analysis of current activity in altcoins and derivatives, see Crypto Markets Today. For a complete list of this week’s events, check out CoinDesk’s “Crypto Week Ahead.”
What is trend?
Today’s sign
The chart shows weekly changes in bitcoin market capitalization relative to an altcoin index that excludes the 10 largest tokens.
Bitcoin has been underperforming for several weeks as the altcoin gauge strengthened and the ratio recently tested a resistance level that has persisted for over a year.
If the falls in zcash, hyperliquid and almost continue, it will most likely fall further.
