FOMO and Greed Dominate Crypto Market
Yesterday, Donald Trump was inaugurated as the second president of the United States, and this had an immediate impact on the cryptocurrency market.
Before the inauguration, Bitcoin reached its highest levels in history, driven by expectations of more supportive policies for technology and innovation.
Quick correction after the peak:
Bitcoin reached $109,300, influenced by the rise in momentum surrounding crypto on social media, with many analysts expecting Bitcoin to reach higher levels.
According to Santiment’s analysis, this excessive optimism often reflects and is called contrarian indicators, as historically, excessively optimistic expectations are associated with sharp corrective movements in prices due to whale selling.
Santiment explained that the trends indicate the dominance of greed and fear of missing out (FOMO), making the market vulnerable to a short-term correction.
The platform recommended that traders be cautious and take an approach contrary to most prevailing expectations.
No Pro-Bitcoin Statements:
Despite expectations that Trump would talk about cryptocurrencies or a strategic reserve of Bitcoin during his speech, there was no mention of these topics, which led to Bitcoin falling to $102,000.
Other cryptocurrencies were also affected, with Cardano, Solana, and Dogecoin falling by more than 9%, while Ethereum and Ripple fell by more than 5%.
Monitoring market trends and social media reactions remains essential for traders at this stage.
