Too much optimism around Bitcoin’s recent rally may be ruining its chances of rising higher in the coming days. This is according to data released by Bitcoin on-chain analytics company, Santiment.
The company shared data in an X post on 29 September showing that there is a massive bias towards optimism for bitcoin’s price. Ironically, this could be a bad omen for the number one cryptocurrency if past events repeat themselves.
History may repeat itself
Santiment estimated that there are nearly twice the number of bullish X posts on Bitcoin compared to bearish posts.
According to the company, bitcoin’s price has historically reacted negatively to such huge bullish sentiments.
As a result, the price of the asset may see a downward movement instead of the $70,000 price that many traders are anticipating.
The data agrees with the Bitcoin Fear and Greed Index, which is a scale that measures the dominant sentiment in the market.
The index ranges from 0 (extreme fear) to 100 (extreme greed). A score of over 50 shows greed, while a score of less than 50 shows fear.
At press time, the index is at 61, which shows greed as investors are quickly transitioning from fear which has been dominant in the market for months.
Massive inflow fueling greed
Bitcoin investment instruments such as ETFs have seen large scale inflows recently, with over $1.1 billion in funds entering the market in the last week. This is the highest flow of funds into the bitcoin ETFs since July.
The huge inflow could be the reason behind the bullish sentiments surrounding bitcoin, because retail investors are becoming more confident seeing that corporate investors are entering the market.
If history repeats itself and Santiment’s prediction comes true, bitcoin price may see lower prices before another leg up. Bitcoin price at press time is $63,978 according to Coin Market Cap, a significant drop from the $66,000 level it hit recently.
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