An increase in mentions of cutting the main interest rate by the Federal Reserve. Santiment noted that the spread of cryptocurrencies on social media could serve as a warning for the cryptocurrency market.
Experts pointed out that the main driver of the recent rise was the dovish tone of Federal Reserve Chairman Jerome Powell, which created a 'buy the rumor' atmosphere.
In the wake of the official's remarks, the S&P 500 reached a new record high, rising alongside Bitcoin and gold.
Analysts said, 'While optimism about interest rate cuts fuels the market, social data indicates the need for caution.'
Mentions of the keywords 'Federal Reserve', 'interest rate', and 'rate cut' on social media peaked at an eleven-month high. Santiment explained that the sharp rise in discussions around a single optimistic narrative historically indicates a buildup of euphoria and suggests a local peak.
The rush to discuss Federal Reserve interest rates indicates potential risks for the cryptocurrency market.
Expectations for Bitcoin's price to rise are increasing, while Ethereum discussions remain neutral. In the context of Ethereum, anticipate a sharp increase in social media posts predicting price rises after the breakout. Subsequently, this may mean reaching a peak and the fear of missing out. Researchers confirmed that 'this comes from retail traders.'
It is worth noting that some financial derivatives metrics indicated the risk of the digital asset market transitioning to a downward trend.
Follow us now for explanations, tips, and in-depth analyses to help you make better decisions in the world of digital currencies.
#Caldera @BounceBit _bit @Caldera Official #bouncebitprime @Treehouse Official #Treehouse @Huma Finance 🟣