A significant number of retail investors are forecasting that the price of bitcoin will exceed $90,000 in the near future, which would result in a positive year-to-date return. However, it remains to be seen whether the market will follow this trend.
According to analytics firm Santiment, which analyzed thousands of social media posts across various platforms, the majority of users are predicting that the price of bitcoin will rise above $90,000. Mentions of lower price ranges, such as $50,000-$59,000, are being dismissed as fear, uncertainty, and doubt. The crowd is expecting the recovery from the February low of around $60,000 to continue into May, fueled by the return of flows into exchange-traded funds and bitcoin's resilience in the face of recent conflicts and DeFi hacks.
However, Santiment warns that this widespread bullishness could be a reason to exercise caution, as overly optimistic social sentiment can often be a contrarian indicator for a potential downturn. This approach is also used by contrarian traders in traditional markets, who utilize 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 just a pause or the start of a broader reversal.