Bitcoin (BTC) has shown resilience after a sharp correction, but experts warn that volatility may not be over yet. According to Santiment, market sentiment has shifted from fear to neutral following a modest recovery, but upcoming macro events could shake things up again.
Bitcoin Price Action: From Panic to Neutral Zone
On Wednesday, Bitcoin dipped to $112,350 on Coinbase, marking a 10% drop from its August peak of over $124,000. This plunge dragged the Bitcoin Fear & Greed Index down to 44, the lowest in two months, signaling fear in the market.
However, a rebound followed on Thursday, with BTC reclaiming $114,500, improving market sentiment. The Fear & Greed Index is now back to neutral (50), suggesting a temporary sigh of relief among investors.
Why More Volatility Could Be Ahead
Blockchain analytics firm Santiment cautioned traders to “watch for more FUD”, warning that markets often move opposite to crowd expectations. Several tokens, including Bitcoin, Tether (USDT), XRP, Cardano (ADA), and the memecoin SNEK, are witnessing a surge in social interest—a potential precursor to increased volatility.
David Bailey, Bitcoin entrepreneur and crypto adviser to President Trump, highlighted the fickle nature of sentiment:
“One moment euphoria, the next panic. Bitcoin ownership shifts hands through these emotions.”
Macro Factors Still in Play: All Eyes on Jackson Hole
Market participants are closely watching Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole conference on Friday, an event historically known to jolt markets.
- If Powell hints at no rate cuts in September, markets could remain under pressure.
- However, a dovish tone suggesting rate cuts could trigger a major rally, according to analysts.
The CME Fed Watch tool currently predicts an 82% chance of a rate cut on Sept. 17, though that probability has been slipping.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.