Warning from Santiment: Bitcoin is in the middle of a 'frenzy' - Is a correction coming soon?

Recently, the market situation has undergone significant changes. The easing of trade tensions between the United States and China, along with the cooling relationship between Donald Trump and Elon Musk, has contributed to a shift in investor sentiment from negative to positive. This has led to a strong change in market sentiment indicators, particularly in the cryptocurrency sector. However, is this optimism a good sign or does it hide underlying risks? Let's analyze this issue further.

Why can market sentiment indicators be a double-edged sword?

According to data from the blockchain analysis platform Santiment, the number of positive comments about Bitcoin on social media is currently double that of negative comments. This ratio, 2:1, is the highest since the U.S. presidential election in November 2024, when Donald Trump's victory triggered a wave of enthusiasm in the cryptocurrency community.

With Bitcoin reaching a record high of $112,000 in recent days, the optimism of retail investors is becoming increasingly evident. However, although this may seem like a positive signal, according to historical patterns, this strong excitement often occurs just before significant price corrections.

Santiment also points out that keywords such as "All-Time High" (ATH) are increasingly being mentioned in discussions about Bitcoin, especially this month. This is an important indicator, as when the price of Bitcoin rises, the euphoric sentiment of retail investors can easily lead to excessive expectations and an increase in greed.

According to this platform, the excitement of retail investors, when it reaches its peak, often signals an impending correction. The spike in discussions about the ATH price is a clear indication that the market is facing a short-term "frenzy." Santiment noted:

"When the market goes against the expectations of retail investors, such events are indeed a solid peak signal."

! Social Volume vs Bitcoin Price | Source: SantimentAnother sign to note is that CoinMarketCap's Fear & Greed Index, a gauge of crypto market sentiment, has entered the "greedy" zone with an index above 60 as of June 2025. In the past, such high indices have often been seen as a warning, indicating that the market is in a "hot" state, with a high probability of a major pullback or correction in the near future.

So, is the current optimism really sustainable? Signs from psychological indicators are warning that the market may be driven by greed and overly high expectations, which could lead to a strong correction when reality does not meet investors' expectations.

Fear and Greed Index Chart | Source: CoinMarketCapAlthough the current crypto market situation shows an optimistic sentiment, caution is still necessary. Signs such as the high positive comment ratio about Bitcoin, the Fear & Greed Index at a high level, and the double top pattern could all be warnings of an upcoming correction.

Nevertheless, the change in market dynamics – as large institutions become the main drivers – makes predicting market trends more complex than ever. Whether Bitcoin can maintain its growth momentum depends on many factors, from political decisions to the strategies of large institutions in the industry.

For investors, it is important to maintain a long-term perspective and not get swept away by the short-term fluctuations of the market. Only careful consideration and a sound investment strategy can help avoid the potential risks in this volatile market.

Taylor