Bitcoin's latest rally past $88,000 has reignited market optimism, but analysts at Santiment caution that excessive optimism could lead to a correction.
The Danger of Greed
Crypto markets thrive on sentiment, and recently, greed is making a comeback after fear dominated in late February and early March. Bitcoin's resurgence to $88,500 has stirred optimism among traders. However, Santiment notes that historically, markets tend to move contrary to public sentiment, suggesting heightened greed could signal an incoming correction.
Bitcoin's Momentum Halt
Bitcoin's upward momentum was halted just below $89,000, with strong resistance attributed to the convergence of the 50-day moving average and descending trendline. The Relative Strength Index (RSI) has also entered overbought territory, indicating that Bitcoin may have reached a local top. Additionally, whale activity indicates profit-taking around the local peak with over 20,000 BTC sold.
Market Outlook
Despite concerns, Bitcoin is back above $88,000 after spending time at $87,000 in the morning. BTC's price has increased by 5.7% over the past week, though its market dominance has dropped to 58.3% as altcoins like Cronos and Dogecoin recorded significant gains.
While Bitcoin's market shows positive momentum, Santiment's warnings about market greed highlight the need for cautious investment strategies in the cryptocurrency space.
