Bitcoin sentiment shifted from fear to neutral as crypto markets rebounded from a correction, but a Friday Fed speech may create more volatility.
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Crypto sentiment has returned to neutral as markets showed signs of recovery on Thursday following a brief dip into the “fear” zone when Bitcoin fell to $112,000 a day earlier.
Still, analysts were quick to warn that more volatility lies ahead.
Bitcoin (BTC) to $112,350 on Coinbase in late trading on Wednesday, marking a 10% correction from its August peak of just over $124,000 and tipping the Bitcoin Fear & Greed Index to 44, its lowest level in two months.
It has since started to recover, reclaiming the $114,500 level during early trading on Thursday, to TradingView, which has resulted in improved sentiment. The index has now shifted back to neutral, with a rating of 50.
“As anticipated, crypto markets have begun to rebound,” blockchain analysts at Santiment, who still cautioned, “watch for more FUD” and “markets move opposite to crowd’s expectations.”
Santiment also several crypto assets that were showing a rising level of social interest, including Bitcoin, Tether (USDT), XRP (XRP), Cardano (ADA), and an obscure memecoin called SNEK.
Bitcoin Fear and Greed Index is 50. Neutral
Current price: $114,056— Bitcoin Fear and Greed Index (@BitcoinFear)
Sentiment flickers like a flame
“One of the most hilarious aspects of Bitcoin is sentiment. It flickers like a flame. One moment euphoria, moments later panic. Many Bitcoin have exchanged hands through such emotions,” Bitcoin entrepreneur and US President Donald Trump’s crypto adviser , who suggested zooming out and staying focused.
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“Crypto prices treaded water over the past week as macro factors added near-term headwinds,” Augustine Fan, head of insights at crypto trading software service provider SignalPlus, told Cointelegraph.
She added that Treasury Secretary Scott Bessent “disappointed observers by stating that the government is not going to purchase any more BTC for its Strategic Bitcoin Reserve,” though Bessent those remarks in an X post hours later.
Total market capitalization has recovered to reach $3.96 trillion following a 2% gain over the past 24 hours; however, more volatility may lie ahead this week.
All eyes on Fed chair’s speech at Jackson Hole
Investors are Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole conference on Friday, which has historically moved markets.
“Markets brace for Jackson Hole as Powell’s tone could jolt equities and crypto,” Bitcoin solutions provider BitGo on Wednesday.
The markets have been front-running the prospect of Powell hinting at no rate cuts in September, but if he “comes in soft and leans that rate cuts are likely, we turbo rip,” author Jason Williams on Wednesday.
“Jackson Hole will shape crypto’s direction moving forward,” CNBC trader Ran Neuner before adding, “Trump is pushing for a rate cut with good reason, but will Powell listen?”
The prediction futures-based CME Fed Watch tool currently an 82% chance of a rate cut on Sept. 17, though the figure has been falling.
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