Analysts say investors’ sentiment for cryptocurrency has skyrocketed this week, increasing retail interest in altcoin, suggesting that Bitcoin’s recent stage of happiness may be coming to an end.
According to Max Shannon, a senior research associate at Crypto Index Fund Manager, the Crypto Asset Sentiment Index rose from 0.23 to 0.91 within a week.
Google searches also rose to multi-year highs reminiscent of the previous Bear market.
These developments mark “classic foam-infused behavior that could precede buyer fatigue.”
Buyer fatigue occurs when a decrease in buy orders is overwhelmed by sales pressure, potentially leading to a pullback in Bitcoin (BTC), causing capital to spin into other cryptocurrencies.
Bitcoin fell below $118,000 on Thursday, saying the government has no plans to make additional purchases for strategic Bitcoin reserves and independent digital asset stockpiling as investors digested comments from U.S. Treasury Secretary Scott Bescent.
Bessent retorted the statement hours later, revealing that his division is still exploring budget-neutral methods to acquire BTC for its strategic Bitcoin reserve.
“The Treasury is working to explore budget-neutral pathways to acquire more Bitcoin to expand its budget and enforce the president’s promise to make the US a “bitcoin superpower of the world,” Bescent wrote in the X-Post Thursday.
The Crypto Fear & Greed Index has moved from “greedy” to “neutral” territory, falling to 59 at the time of writing, down from 68 on Thursday.
Despite the decline to neutral territory, investors’ sentiment “is growing euphoria, but leaves room for trends to continue if macros don’t get worse,” according to Stella Zlatareva, temporary editor at the digital asset investment platform Nexo.
Favorable policy developments, such as the deadline for the Securities and Exchange Commission’s next Solana Exchange Transaction Fund (ETF) decision in October, told Cointelegraph that “the broader uptrend story remains the same.”
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Buyer fatigue could precede Altcoin Rally in September
While a wider crypto market correction may occur while the distinctive investor activity is lacking in August, many industry watchers are hoping for an Altcoin rally in September.
“We believe that current market conditions suggest a potential shift in current market conditions to a full-scale Altcoin season,” said David Duong, global research director at Coinbase Institutional, global research director at Coinbase Institutional, who wrote in Thursday’s monthly outlook report.
The Altcoin season means that at least 75% of the 50 largest Altcoins by market capitalization are better than Bitcoin prices in the last 90 days.
Related: Bitcoin’s corporate boom raises concerns about nationalisation of “Fort Knox”
The index for the Altcoin season has risen from 33 to 42 over the past week, but below the 75 level marking the start of the Altcoin season.
According to Michaël Vande Poppe, the price of Bitcoin and Ether could “provide the best window for the first serious legs of Altcoins.”
“Like Ethereum did, they’re ready to start running. What’s the rise? It’s probably 100-150% on the first run,” analysts said on the X-Post Friday.
https://www.youtube.com/watch?v=20zfedqdkl8
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