Rising Bitcoin prices ignite retail enthusiasm: Is the market near a short-term top?

Yesterday, on Tuesday, Bitcoin prices rose to their highest level in three weeks, touching the $94,600 level, reigniting optimism among traders.

However, growing greed among individual investors has fueled concerns that the rise is being driven by unsustainable FOMO.

“Santiment” platform data shows a clear increase in the use of expressions and semantic words such as “above” and “above” across communication platforms, which has historically been interpreted as a sign of exaggerated expectations that may precede periods of stable or declining prices.

When optimism rises sharply, markets tend to move contrary to popular expectations.

This proposal is in line with the vision of analyst Markus Thelen, who ruled out the possibility of a major price breakout in December, explaining that the reduction in large moves reflects expectations of narrowing price volatility.

He also noted that the increase in Bitcoin-related ETF flows was not enough to fuel a strong rebound, suggesting sideways trading for the remainder of the month.

On the other hand, the Coinbase platform believes that the market may be ready for the New Year holiday, considering that November’s turmoil helped liquidate inflated positions and establish a healthier market structure.

Open interest in Bitcoin and other cryptoassets fell, U.S. ETFs exited en masse, and funding rates for perpetual contracts fell below average.

Coinbase reports that system leverage levels have dropped from around 10% in the summer to currently 4%-5% of total market capitalization, increasing the market’s resilience as the end of the year approaches.

Also read:

Digital currency ZEC price jumps weekly: Is the currency price target $600 level?

The digital currency market fell sharply: Bitcoin price fell, HYPE currency led the decline