Bitcoin Sentiment Ratio Has Spiked, But Value Still Not Too High
According to data from the analytics firm , Bitcoin Fear Of Missing Out (FOMO) has remained low through the latest rally. The indicator of relevance here is the “Positive Sentiment vs. Negative Sentiment Ratio,” which, as its name suggests, measures the ratio between the positive and negative comments around BTC being made on the major social media platforms.
To separate the posts/threads/messages on these platforms between positive and negative, Santiment’s indicator uses a machine-learning model.As the above graph shows, this Bitcoin indicator has observed an uplift alongside the latest recovery run in the cryptocurrency’s price. This rally has come as the US Federal Reserve has announced an interest rate cut.
The indicator is currently decently above the neutral mark, meaning that positive posts notably outweigh the negative ones. Historically, the asset has tended to move in a direction opposite to what the crowd is expecting, with the probability of the contrary move going up the stronger this expectation becomes.
A very bullish market can be a warning sign for the BTC price. Despite the recent surge in sentiment, FOMO is not yet at a level where it would be a problem. The chart shows that the previous spikes in the indicator that occurred around the tops for Bitcoin were of a significantly large scale. The last few months have also seen the indicator generally maintain a positive level, so the metric’s current value isn’t even that out of place when compared to the norm.