Bitcoin’s top is pending as market sentiment remains high

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Bitcoin may not hit a new high anytime soon as market sentiment remains too bullish, Santiment suggested in a recent post on X.

“If you’re waiting for Bitcoin’s new high, you may have to wait until the crowd slows down its own expectations,” Santiment said.

The ratio of bullish to bearish posts on Bitcoin is currently 1.8 to 1, which Santiment explained indicates an excessive level of excitement in the market.

However, historically, the market tends to “move in the opposite direction of the crowd’s expectations.” This means that Bitcoin could enter a correction amid the high level of optimism.

The flagship crypto may end September in the green despite starting the month on a low note. BTC dipped below $53,500 in the first week of the month, but has since rallied more than 10% to $64,000. The increase was indeed unexpected as September has historically been associated with a downtrend.

A major factor that caused the price of Bitcoin to rise towards the end of this month is the adjustment of monetary policies in the US and China.

On September 19, the Fed made its first rate cut in 4 years. An aggressive 50 basis point cut pushed Bitcoin above $63,000, up 6% following the decision.

Last week, China joined the Fed with a pandemic-level stimulus package that would inject about $140 billion into its economy. The move is expected to create a favorable macro environment that could drive Bitcoin to new all-time highs, similar to previous actions that led to over 100% increases in Bitcoin price.

Bitcoin broke the $66,000 level, marking the best September ever. However, the bullish momentum is fading as the market heads into a new week with focus on Fed Chairman Jerome Powell’s speech and US non-farm payrolls data.

Powell’s comments on inflation and interest rates could impact crypto markets, while the upcoming jobs report may influence the Fed’s approach to interest rates, potentially affecting risk assets like crypto.

Bitcoin fell 1.5% to $64,500 in the past 24 hours, while Ethereum fell slightly to around $2,600, on CoinGecko. Despite short-term fluctuations, analysts remain bullish on crypto prices for Q4, citing favorable macro conditions and political support.

The Crypto Fear and Greed Index fell 2 points to 61 on Monday, but sentiment remains in the “greed” zone, according to Alternative.me.

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