In recent weeks, Bitcoin Sentiment was most bullish when the price was highest and most bearish exactly when it was most stressed, according to Santiment data covering the period May 21 to June 4.
The bullish peak hit on May 22, with bitcoin near its high of $78,000 for the period. The most bearish occurred on June 3, with bitcoin near the low. Although sentiment is not a timing tool, the peak of conviction at the highs and the peak of fear at the lows are the opposite of what the trade usually yields.
Bitcoin was recently trading near $62,400, down about 20% from its peak in late May. The risk picture has also collapsed.
Investments in artificial intelligence (AI) companies that have driven global stocks to record highs this year have stalled after Broadcom’s chip forecasts fell short of 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 ended a 13-day outflow streak of $4.4 billion on Thursday with a small inflow of $3.05 million. Spot Ether ETFs ended their 17-session parallel streak with $19.30 million on the same day. These two figures are too low compared to the streaks they ended to speak of a regime change.
The binary catalyst is the U.S. Nonfarm Payrolls report released Friday at 8:30 a.m. ET. A weak reading revives expectations that the Federal Reserve will cut interest rates under new Chairman Kevin Warsh and will likely lift risk assets, while a warm reading could prolong the unwind.
And keep an eye on how Bitcoin performs at the $60,000 round number if tested before the data arrives. Stay vigilant!
Read more: For analysis of current altcoin and derivatives activity, see Crypto Markets Today. For a full list of this week’s events, check out CoinDesk’s “Crypto Week Ahead.”
What is the trend
Signal of the day
The chart shows weekly changes in Bitcoin’s market cap against an altcoin index that excludes the 10 largest tokens.
Bitcoin has underperformed for several weeks as the altcoin’s metric has grown stronger, and the ratio recently tested a resistance level that has persisted for over a year.
If the decline in zcash, hyperliquid and quasi continues, there is a good chance that it will drop even further.
