The cryptocurrency market sentiment has returned to neutral, showing signs of recovery on Thursday after Bitcoin briefly dipped into the "fear" zone when it fell to $112,000 a day earlier.
However, analysts quickly warned that more volatility is expected in the future.
According to TradingView data, Bitcoin (BTC) traded down to $112,350 on Coinbase on Wednesday evening, a 10% pullback from its August peak of just over $124,000, which caused the Bitcoin Fear and Greed Index to drop to 44, the lowest level in two months.
However, it began to recover afterward, reclaiming the $114,500 level in early Thursday trading, which improved market sentiment. The index has now returned to neutral, rated at 50.
Santiment blockchain analysts stated, "As expected, the cryptocurrency market has begun to rebound." They cautioned, "Watch for more FUD" and "market trends going against public expectations."
Santiment also specifically mentioned several cryptocurrencies showing increased social attention, including Bitcoin, Tether (USDT), Ripple (XRP), Cardano (ADA), and a niche meme coin called SNEK.
"One of the funniest aspects of Bitcoin is its sentiment. It flickers like a flame. One moment it's euphoric, the next it's panic. Many Bitcoins change hands in this sentiment," said Bitcoin entrepreneur and former President Trump's cryptocurrency advisor David Bailey, who suggested broadening perspectives and staying focused.
"The cryptocurrency prices have been stagnant over the past week, with macro factors adding recent resistance," said Augustine Fan, insights director at cryptocurrency trading software provider SignalPlus, to Cointelegraph.
She added that U.S. Treasury Secretary Scott Bessent "disappointed observers by stating that the government would not buy more BTC for its strategic Bitcoin reserves," although Bessent seemed to retract those comments in a post on X a few hours later.
The total market capitalization has recovered to $3.96 trillion after a 2% increase in the past 24 hours; however, more volatility may be expected this week.
Investors are eagerly awaiting Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole conference on Friday, which has historically influenced the market.
Bitcoin solution provider BitGo stated on Wednesday, "The market is preparing for Jackson Hole, as Powell's tone could shake the stock and cryptocurrency markets."
The market has been pricing in Powell's hints of no rate cuts in September, but if he "takes a dovish tone and leans towards possible rate cuts, we will see a significant rise," author Jason Williams commented on Wednesday.
CNBC trader Ran Neuner stated, "Jackson Hole will shape the future direction of cryptocurrency," and added, "Trump has every reason to push for rate cuts… but will Powell listen?"
The CME FedWatch Tool, based on futures predictions, currently forecasts an 82% probability of a rate cut on September 17, although this number has been declining.
Related: Wyoming seminar expert: The U.S. must pass regulatory legislation or risk falling behind in the cryptocurrency race.
Original article: “Santiment: Bitcoin (BTC) rebounds from fear zone, but ‘FUD’ may not be over”
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