A recent surge in social media posts is predicting that Bitcoin's price will exceed $90,000, which could turn the year-to-date return from negative to positive. However, it remains to be seen whether the market will follow this trend.
Analytics firm Santiment analyzed thousands of crypto-related posts across various platforms and found a significant bias towards a price above $90,000. The crowd is dismissing mentions of lower price ranges as fear, uncertainty, and doubt.
The expected recovery from the February low of around $60,000 is anticipated to continue into May, driven by factors such as the return of flows into exchange-traded funds and Bitcoin's resilience in the face of recent global events. Santiment warns that this widespread bullishness could be a reason to exercise caution, as overly optimistic social sentiment can often indicate a potential bearish performance.
This phenomenon is reminiscent of the wisdom of American poet Charles Bukowski, who advised to 'run in the other direction' when following the crowd. In traditional markets, contrarian traders use sentiment gauges, such as the AAII Investor Sentiment Survey and the CNN Fear & Greed Index, to inform their decisions.
Notably, Bitcoin's recovery rally has already experienced a setback this week, with prices retreating to $77,000 from highs above $79,000 on Monday, leaving the question of whether this is a temporary pause or the start of a broader reversal.