While the broader cryptocurrency market is in panic, the Ethereum community has suddenly found optimism. But isn’t this enthusiasm… premature?
The Santiment analytics platform has seen a marked shift in sentiment among ETH traders on social media. After Thursday’s price jump to almost $3,500, comments about Ethereum have become decidedly more bullish. On average, there were 2.7 positive comments per negative one – the highest rate since July.
FOMO as a brake on growth?
As ETH approached $3,500, the crowd took it as a signal that the asset was coming back into play. On Friday morning, Ethereum was trading at $3,323, staying in a range of $3,251-$3,451.
Ethereum traders went from extreme bear to extreme bull in a flash
– Santiment noted.
But be careful, because Santiment warns that this sudden surge of optimism could be… a bearish signal. According to the platform, prices have historically moved in the opposite direction to crowd expectations. On Tuesday, when Ethereum was trading at $3,700, the sentiment indicator showed just 0.86 positive comments to one negative – the second most pessimistic reading since April.
“Historically, we want to see FUD continue, as happened on Tuesday.”
– explains Santiment.
The sell-off helped fuel the recent rally, but now FOMO may bring it to a halt. A real buy signal? It will appear when traders calm down from expectations of a quick return to USD 4,000 and bullish sentiment calms down.
The rest of the market is still in fear
While the Ethereum community celebrates, the broader cryptocurrency market remains in panic mode. The Crypto Fear & Greed Index recorded a score of 24 out of 100 on Friday, which indicates “extreme fear.” On Tuesday, the index fell 50% to just 21 points – its lowest level in almost seven months.
Analysts point to U.S.-China trade tensions and other macroeconomic factors as reasons for the current weakness. Bitcoin briefly fell below $100,000 for the first time in three weeks, adding to the pessimism.
Against this background, the posts of Samson Mowa from Jan3 look interesting, as he argues in a series of bullish entries that the Bitcoin boom is just beginning. Who is right – optimistic ETH traders or a terrified market? We’ll find out soon.
