The post Why Bitcoin is down today: Market overconfidence triggers crash appeared on BitcoinEthereumNews.com.

Bitcoin sentiment spikes with ETF inflows, but analysts warn of a bearish head and shoulders pattern. Market corrections follow Bitcoin’s bullish sentiment, with the MVRV ratio showing balanced market conditions. Bitcoin [BTC] has experienced a market correction following a period of increased bullish sentiment.  According to market intelligence platform Santiment, the crowd’s optimism toward Bitcoin has been steadily growing, with sentiment data showing a notable shift. This optimistic outlook, however, has raised concerns of a potential market top, which often leads to price corrections in the cryptocurrency space. Bitcoin’s price retraced from $65,664 to $63,243 on Monday, triggered by some panic selling. Santiment warns that if the current fear of missing out (FOMO) turns into fear, uncertainty, and doubt (FUD), Bitcoin’s market could experience heightened volatility.  Santiment noted that the market has historically moved against crowd expectations, signaling a potential continuation of this correction. Rising sentiment and ETF inflows Santiment’s analysis from last Friday indicated growing confidence among Bitcoin traders, following a 22% price surge over the past three weeks. The sentiment ratio, which tracks the balance between bullish and bearish posts about Bitcoin, revealed a significant rise in optimism, with 1.8 bullish posts for every bearish post.  While this suggests positive sentiment, Santiment points out that excessive confidence often precedes market downturns, as traders may be overly optimistic. Source: Santiment At the same time, Bitcoin exchange-traded funds (ETFs) have seen massive inflows. On the 30th of September, Lookonchain reported that $BTC ETFs witnessed 7,111 BTC in net inflows. This equated to approximately $453.42 million.  A substantial portion of this, around 3,085 BTC ($196.71 million), came from ARK21Shares, elevating its cumulative holdings to nearly 50,684 BTC.  These institutional inflows come as market participants await the U.S. Securities and Exchange Commission’s (SEC) decision on pending applications for spot Bitcoin ETFs. The…

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Filed under: News - @ October 1, 2024 10:15 pm