A significant number of retail investors believe 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. Analytics firm Santiment analyzed thousands of social media posts and found that the majority of users are expecting the price of bitcoin to continue its recovery from the February low of around $60,000.
Despite recent negative news, including Iran-related conflict, oil price surges, and DeFi hacks, the price of bitcoin has held steady, leading many to believe that the market is bullish. Nevertheless, Santiment warns that this excessive optimism could be a sign of a potential downturn, as overly bullish social sentiment can often act as a contrarian indicator. This phenomenon is not unique to the cryptocurrency market, as contrarian traders in traditional markets also use sentiment gauges to inform their investment decisions.
In fact, the recent recovery rally of bitcoin has already stalled, with prices pulling back to $77,000 from highs above $79,000 on Monday, leaving many to wonder if this is just a pause or the start of a broader reversal.