Crypto Market Sentiment returned to neutral as it showed signs of recovery Thursday following a brief immersion in the “fear” zone when Bitcoin fell to $112,000 a day ago.
However, analysts quickly warned that more volatility would be ahead.
Bitcoin (BTC) fell to $112,350 on Coinbase in late trading on Wednesday, recording a 10% correction just above $124,000 from its August peak, chipping the Bitcoin Fear & Greed Index to 44 at its lowest level in two months.
However, it has since started to recover, regaining its $114,500 level during early trading on Thursday. The index has now returned to neutral with a rating of 50.
“The crypto market has begun to recover as expected,” said a blockchain analyst at Santiment.
Santiment also designated several crypto assets with increasing levels of social interest, such as Bitcoin, Tether (USDT), XRP (XRP), Cardano (ADA), and the ambiguous Memecoin called Snek.
Emotions flicker like flames
“One of the most hilarious aspects of Bitcoin is the emotions. It flickers like a flame. One moment, a moment, a moment, after a while, panic. Many Bitcoins have exchanged their hands through such emotions.
Augustine Fan, Head of Insights at Signalplus, a Crypto Trading Software service provider, told Cointelegraph.
She added that U.S. Treasury Secretary Scott Bescent “disappointed the observers by saying the government doesn’t intend to buy any more BTC for its strategic Bitcoin reserve,” but it appeared that Bescent backtracked X’s remarks a few hours later.
Total market capitalization has recovered to $3.96 trillion after an increase of 2% over the past 24 hours. But there could be more volatility ahead this week.
Turn to the Fed Chair speech at Jackson Hole
Investors are eagerly awaiting a speech from Federal Reserve Chair Jerome Powell at the Jackson Hole meeting on Friday.
“Jackson Hole’s market braces are possible as Powell’s tone can shake up stocks and crypto,” Bitgo said on Wednesday.
The market is at the forefront of Powell’s predictions in September that he suggests with no-rate cuts, but if he “comes soft and there’s a high chance that that rate cut is likely, we’ll turbo-lip,” author Jason Williams commented Wednesday.
“Jackson Hole will move forward with Crypto’s direction,” CNBC trader said, “Trump is asking for rate cuts for good reason, but will Powell hear?”
The forecast futures-based CME Fed Watch tool currently forecasts a potential 82% fee reduction on September 17th, but the numbers are falling.
