High FOMO Levels Suggest Bitcoin Rally Halt After BTC Surges Above $64,000

The last ten days have been quite positive for bitcoin, with the asset gaining almost ten thousand dollars during this period, mainly thanks to the US Federal Reserve’s decision to cut key interest rates.

However, some social indicators suggest that the cryptocurrency run may be over, at least in the short term.

Will FOMO Stop Bitcoin’s Uptrend?

It was on Wednesday, September 11, that the price of bitcoin plummeted after the release of the US CPI figures. At the time, the asset had fallen to $55,500. However, it went on the offensive in the following days, amid continued speculation about the Fed’s next decision.

A week later, the US central bank decided to deviate from its four-year monetary strategy and cut interest rates, following the ECB, the Bank of Canada and the Bank of England.

After the inevitable immediate volatility in Bitcoin and other markets, the cryptocurrency responded well and gained nearly five thousand dollars in a matter of days, going from $59,500 to a three-week high of $64,000. However, its rally has stalled for now and the asset has returned to just under $63,000.

Santiment data suggests that this slowdown could be followed by an even more violent retracement due to social media interactions. FOMO (Fear of Missing Out) levels have skyrocketed this week to the fourth highest level since the beginning of the year. Typically, such rapid increases are followed by corrections, as happened after the March ATH and the rallies in early June and late July.

With a very bullish week for cryptocurrencies transitioning into weekend mode, @santimentfeed saw a spike in very bullish sentiment among the crowd. Naturally, the crowd has reason to be optimistic that Bitcoin and other cryptocurrencies will continue to rise after the Fed’s first rate cut in 4.5 years. pic.twitter.com/KTosasj6tS

— Santiment (@santimentfeed) September 21, 2024

Santiment warned that the cryptocurrency market is particularly sensitive to such reactions and generally tends to go in the opposite direction.

Return to neutral

The Fear and Greed Index, which assesses different information such as social media interactions, price movements, surveys, etc., to determine the current sentiment towards the industry, has increased by 21 points in the last few days.

By September 17 (the day before the rate cut), bitcoin had returned to a “fear” level (33), but hit a multi-week high of 54 (neutral). Recall that bitcoin’s price fell from $65,000 to below $52,000 a few weeks after the last time the index reached such a high level so quickly.