The majority of retail investors are predicting that the price of Bitcoin will exceed $90,000 in the near future, which would turn the year-to-date return from negative to positive. However, it remains to be seen whether the market will follow this trend. A recent analysis by Santiment, which scanned thousands of social media posts across various platforms, found that the majority of discussions are leaning towards a price increase above $90,000. The $50,000-$59,000 price range is being dismissed as a sign of fear and uncertainty.
The crowd is expecting the slow recovery from the February low of around $60,000 to continue into May, fueled by the return of exchange-traded funds and Bitcoin's resilience in the face of recent global conflicts and DeFi hacks. However, Santiment warns that this bullish sentiment could be a reason to exercise caution, as overly optimistic social sentiment can often act as a contrarian indicator for a potential downward trend.
This phenomenon is reminiscent of the words of American poet Charles Bukowski, who advised to 'run in the other direction' when the crowd is moving in a particular direction, as they are often wrong. Contrarian traders use similar sentiment gauges, such as the AAII Investor Sentiment Survey and the CNN Fear & Greed Index, to inform their decisions. Interestingly, Bitcoin's recovery rally has already stalled this week, with prices pulling back to $77,000 from highs above $79,000 on Monday, leaving it uncertain whether this is a pause or the start of a broader reversal.