Bitcoin’s All-Time High Challenge Seen in Near Term Despite Market Optimism; Analysts Look to Ethereum
Despite widespread market expectation that Bitcoin (BTC) will soon reach new highs, analysts warn this prevailing sentiment might actually stifle short-term bullish movements. However, the spotlight may instead fall on Ethereum (ETH), with some analysts pointing towards a potential surprise performance in the coming months.
Bitcoin’s ATH Anticipation Could Hinder Immediate Surge
According to Santiment analyst Brian Quinlivan, significant levels of anticipation for Bitcoin’s next all-time high (ATH), currently nearing $109,679 despite being only 2.1% off its May 22, 2024 peak, might indicate preparatory positioning for future upward movement. However, Quinlivan noted a historical pattern: “markets move the opposite direction of retail’s expectations,” suggesting current bullish anticipation could coincide with near-term consolidation rather than a guaranteed surge.
Quinlivan suggested that the recent “frustrating ‘close calls'” near the ATH could provoke a shift in sentiment, especially among smaller traders, potentially leading to an aggressive upswing once skepticism solidifies.
Current market sentiment, measured by the Crypto Fear & Greed Index, registers as “Greed” at 72 out of 100.
Third Quarter (Q3) Typically Weak for Bitcoin
Further dampening immediate Bitcoin enthusiasm is the historical trend for the cryptocurrency’s third quarter. Data from CoinGlass indicates that since 2013, Bitcoin has averaged a negative 6.03% return during Q3, contrasting sharply with the subsequent quarter’s robust average gain of 85.42%.
Derive Research Head of Research, Dr. Sean Dawson, agrees, forecasting Bitcoin “will likely underperform” in the current third quarter amid macroeconomic uncertainty.
Dawson highlighted the Federal Reserve’s anticipated policy stance: despite political pressure, the Fed seems poised to maintain interest rates steady around 4.25%–4.50%. This rate setting could limit Bitcoin’s appeal as a high-return asset, alongside broad uncertainty.
The relative lack of volatility is expected shortly by most market participants (99.9%) regarding Fed rates staying unchanged.
Ethereum’s Path to Catch-Up Gain Draws Analysts’ Notice
Where analysts see potential does not rest on Bitcoin. Instead, they are highlighting a “high level of optimism” surrounding Ethereum (ETH).
After an April 9, 2024 low of around $1,472, ETH has recovered strongly to trade near $2,793 as of the latest data.
Quinlivan explained that the dominance of Bitcoin’s recent gains may have erased some short-term buying pressure on other cryptos, including Ethereum. He observed that “Bitcoin’s jump over the past couple of months has… allowed profit taking and such, [enabling] other market caps to achieve. And it really wasn’t clear until ETH was really seeing maximum bearishness a couple of months ago.”
Quinlivan called more attention focusing on Ethereum. Dawson, while not commenting specifically on ETH’s immediate prospects, noted that summer’s traditional quiet period for crypto trading could lead to sideways movement or sharp pullbacks as traders consolidate earlier gains.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
