Retail traders are suddenly calling for higher prices again as Bitcoin rallies toward $64K, a shift analysts say may be a reason for caution.
Crypto traders have been changing their mindsets on several occasions in the past one month when they were bearish at the beginning of June before becoming bullish in mid-June.
Now, with Bitcoin price rebounding toward $64,100, the crowd is back to expecting higher prices, Santiment, a crypto analytics firm, wrote in a research note today.
But as the analysts emphasized, social signals can be used as counter-signals since retail investors usually take part in the prevailing trade after the price move.
“Crypto typically moves opposite to what the crowd is most loudly expecting, because markets tend to punish crowded trades.”
That doesn’t mean the end of the bounce back, but the analysts pointed out that this renewed bullish call comes as an indication that perhaps the market needs to calm down first before rising:
“Optimism doesn’t mean the rally is over, but when traders quickly shift back to calling for higher prices, it’s a sign bulls may need a cool-off before the next cleaner leg up.”
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Bitcoin Rallies But Context Stays Mixed
Glassnode, another crypto analytics firm, made a similar don’t-get-too-bullish point earlier this week, saying the Bitcoin price recovery still looks more like consolidation.
The analysts referred to reduced spot selling pressure, ETF outflows, and low volumes in addition to an influx of “hot money,” which began pouring back into the market.
Hence, Bitcoin appears to be in better shape compared to its performance in June when it experienced the price dip, although retail investors have already jumped into the higher-priced action. And Santiment suggests that could lead to vulnerable moves in the short term.
As of press time, Bitcoin is trading at $62,600, down 1.1% on the day, but still up 6.7% on the week, per data from Bitcoin Foundation’s price tracking page.
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Source: Original Article
