Ethereum Traders Just Flipped Bullish, But History Says This Is a Major Red Flag

Ethereum traders have swung sharply from extreme bearishness to extreme bullishness within just a few days, based on social media sentiment. But fresh data suggest that when ETH nearly rebounded to $3,500 on Thursday, the crowd interpreted the move as a confirmation that the asset was “back in business.” ETH Trader FOMO Santiment warned that this sudden pivot is similar to the same pattern seen earlier in the week, when retail panic selling actually contributed to the rebound. Now, the rapid return of FOMO could similarly stall further upside. According to the analytics platform, prices have shown a tendency to move in the opposite direction of the crowd, and that more neutral sentiment phases have proven to be stronger buy signal environments than euphoric ones. Crypto trader Ted Pillows also noted that even though the altcoin is showing some rebound after this week’s sharp decline, the recovery lacks conviction. According to Pillows, the current move higher, though modest, is being driven largely by short positions being closed rather than new spot buyers stepping in. He added that Ethereum needs to reclaim the $3,600-$3,700 price range with meaningful inflows to establish strength and dismiss the risk of further downside. Without that confirmation, Pillows believes the odds still favor lower prices from here. Despite the near-term uncertainty, some traders say the bigger picture is still pointing toward a substantial upside scenario. For instance, crypto trader “Trader Tradigrade” said that ETH’s monthly chart is currently developing what he describes as a massive Inverse Head and Shoulders pattern, with a potential price target of $14,000 once confirmed. “Wet Blanket” Phase As the crypto market remains sluggish, Galaxy CEO Mike Novogratz believes that this could be due to long-term holders rebalancing their net worths and diversifying away from massive concentrated holdings after a very long bull market. Novogratz deems this to be a healthy sign in the medium and long term as these positions get distributed. In the short run, however, he said that “it’s a proverbial wet blanket” and has weighed on prices. He went on to add, “I do not think we have seen cycle highs. I think by year-end, we (will) see a new Fed chair, and he will be far more dovish than markets are used to. Hopefully, that gives enough narrative to propel the next leg higher.” The post Ethereum Traders Just Flipped Bullish, But History Says This Is a Major Red Flag appeared first on CryptoPotato.