According to Odaily Odaily, analysts at blockchain analytics platform Santiment pointed out that cryptocurrency market participants showed strong sentiment on social media at the beginning of the year, but also warned that whether the market can rise further depends on whether retail investors can remain rational.
“We need retail investors to maintain a certain level of caution, a certain level of pessimism, and a certain level of impatience,” Santiment analyst Brian Quinlivan said in a YouTube video released on Saturday. While other crypto sentiment indicators show fear among market participants, Quinlivan said Santiment’s social media data points in the opposite direction.
“The current sentiment is very positive,” he said. “Usually this is somewhat worrying, but this could just be a normal rebound after the holidays.” Quinlivan said he wasn’t overly concerned about “a surge of FOMO,” but added that such sentiment could flood the market if Bitcoin quickly climbs to $92,000. When market euphoria is too high, the cryptocurrency market tends to move in the opposite direction to what most people expect.
Quinlivan points out that Bitcoin's rapid price surge to this level will reveal "the true reaction of retail investors": "If they start pouring money in because of 'Bitcoin's rise,' that would be a negative sign." Despite historically strong January performances, the crypto market still faces fear signals. Retail frenzies in the cryptocurrency market often occur near all-time highs or cyclical peaks, and historical data shows that the market often follows with a decline.
