Nearly half of all crypto-related mentions on social media this week centered around Bitcoin as it hit new highs, a level of dominance that may signal a local top and a potential short-term pullback, according to sentiment platform Santiment.
“As Bitcoin’s market value crept above $123.1K for the first time in its 17+ year history, there was an equally historic social dominance spike,” Santiment analyst Brian Quinlivan said in a report on Wednesday.
Surging Bitcoin chatter has led to price dips
“43.06% of all crypto discussions were about $BTC just as the coin’s market value was peaking,” Quinlivan added. Quinlivan said that “the sudden spike was indicative of many retail traders FOMO’ing in,” challenging the view held by several other industry participants who believe retail investors have yet to enter the market.
On July 11, Bitwise head of research André Dragosch said, Bitcoin (BTC) is at new all-time highs, but retail is “almost nowhere to be found.”
Just three days after, on Monday, Bitcoin reached an all-time high of $123,100 on Binance, before retracing to $117,011 at the time of publication, according to Nansen data.
Quinlivan said that while rising sentiment may seem positive, history shows that spikes in social media mentions about Bitcoin are often followed by price declines.
“Wait for the euphoria to cool down some, and you’ll likely find another key entry point coming up,” he said.
It comes after Quinlivan’s recent warning that similar spikes in trader optimism were followed by Bitcoin price drops on both June 11 and July 7.
Analysts are optimistic that the Bitcoin surge will continue
However, some analysts say the uptrend is likely to continue.
On Wednesday, CryptoQuant analyst Axel Adler Jr pointed to the absence of the Bitcoin peak signal, which is a metric that shows up when the market is overheated, suggesting “we’re not at a peak yet.”
Related: Bitcoin resistance at $120K hints at consolidation before impulse rally to $135K
However, Galaxy Digital’s head of franchise trading, Michael Harvey, said Bitcoin could be in for a brief consolidation phase after its recent surge to new all-time highs, but another leg up before the end of July isn’t off the table.
“Consolidation around current prices is my base case given the large rally and new ATH,” Harvey told Cointelegraph.
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