According to Santiment, an on-chain analytics platform, the mood among crypto traders has shifted towards negativity, with heightened feelings of fear, uncertainty, and doubt (FUD). However, some analysts believe this trend will be short-lived.
Santiment noted in a recent post on X that Bitcoin (BTC) prices have dropped, leading many traders to discuss selling strategies as markets plummet and concerns about a bear market grow.
Interestingly, the market often moves contrary to crowd expectations, suggesting that the recent wave of FUD may signal that actual fears won’t materialize.
As of Sunday, the market sentiment seemed bleak, indicating a temporary retreat among investors, according to Santiment.
Experts shared with Cointelegraph that this negative atmosphere might dissipate quickly, especially if Bitcoin rebounds and there are signs of possible interest rate cuts in the US.
A key catalyst for rate-cutting agility in the US
Some analysts and financial institutions anticipate at least two interest rate reductions in 2025.
Pav Hundal, a market analyst at Australian crypto broker Swyftx, mentioned that many are keenly awaiting the Fed’s upcoming meeting, as potential cuts could serve as a crucial trigger for a market recovery.
He pointed out that current concerns about the bond market and job openings are drawing attention. This appears to be a necessary adjustment after a period of extreme emotional responses.
Hundal noted, “There’s an Euphoria index model indicating that BTC’s recent peak is reflective of a heated market.”
“Bitcoin’s 30-day rolling performance is negative, indicating a correction has already taken place.”
A $117K breakout might bullish bitcoin sentiment
The Crypto Fear & Greed Index, which gauges broader market sentiment, turned “neutral” this Monday after previously showing “fear” for several days and “greed” the month before.
Charlie Sherry from BTC Markets Crypto Exchange mentioned that trader sentiment often swings to extremes. When traders are overly bearish, it can sometimes mark the end of a downward trend rather than the beginning.
“If Bitcoin returns to $117,000, I think sentiment will bounce back quickly. We’re already noticing early signs of Bitcoin recovering to its current level,” he stated.
“Bitcoin has surpassed the $100,000 mark, and now the big question is: ‘What’s next?’ The $200,000 target is significant for the next high timeframe, but reaching it seems distant, both in time and price, which adds short-term uncertainty.”
Additionally, a new initiative from the Cryptocurrency Ministry has encouraged businesses to vie for more digital assets, which could further influence market emotions.
An example is a company in the design and manufacturing sector that recently secured $1.65 billion for a strategy focusing on Solana (SOL).
Sherry noted, “While there are benefits to Solana Treasury trades, they might not yield returns as substantial as those seen with Ether. Still, this trend could positively influence sentiment.”
Traders are more cautious in September
On another note, Ck Zheng, co-founder and chief investment officer at ZX Squared Capital, mentioned that historically, September has been the toughest month in terms of trader sentiment.
However, he remains optimistic that the prevailing negative sentiment is only temporary and may shift based on various indicators, including consumer and producer price indices, as well as the effects of tariffs from US President Donald Trump.
In the past, crypto markets have reacted sharply to Trump’s tariff announcements, often leading to declines when these tariffs were implemented.
