Why is Positive Retail Investor Sentiment a Warning Sign?

Market conditions have changed considerably. The relaxation of American-china tariff tensions and the cooling relationship between Trump and Musk have helped transform the feeling of negative investors to the positive.
However, this optimistic feeling can be worrying about the reactions of the past market. Let’s dive into the details.
How can market feel indicators be a double-edged sword?
According to Santiment, an analysis platform for leading blockchain, there are more than twice as many positive Bitcoin comments (BTC) on social networks than negative comments.
This report 2: 1 has been the highest since the American presidential election in November 2024, when Donald Trump’s victory sparked the enthusiasm of cryptography.

“With Bitcoin teasing its $ 112,000 higher in the last two days, the retail trade has become optimistic,” noted Santly.
Although this may seem a strong signal, historical models suggest that such an excitement often precedes important market corrections.
Santiment also reported that keywords as “all high times” appear more frequently in Bitcoin discussions than any other time this month.

Compared to the Bitcoin price, periods of strong retail enthusiasm this month often preceded price corrections.
“Since the markets move the opposite management of the expectations of retail, the discussion points linked to the ATH BTC are solid signals, indicating greed,” added Santiment.
This trend is aligned with the FEAR & GREED CoinmarketCap index, a measure largely followed by the feeling of the cryptography market. In June 2025, the index entered the “greed” area, with a reading greater than 60.

In the past year, such high readings have often served as warning panels. They suggest that the market can overheat and may be due to a decline.
The veteran merchant Peter Brandt questions a high -top training
The veteran Peter Brandt recently raised concerns concerning a potential rehearsal of the Bitcoin bears market in 2022. He highlighted the possibility of a drop of 75% as a result of a “double-sum” model.

Although he did not make a final prediction, his comments imply that a significant slowdown could be imminent, similar to the deep fall in 2022 when Bitcoin plunged from his ups.
Brandt’s observations suggest that the financial markets often repeat models of behavior. The structure of the current graphic closely resembles the configuration that preceded the previous crash.
One of the strongest counter arguments of this lower view highlights a key difference in the current cycle. An X user (formerly Twitter) named Death Ca₿ in Qe drew attention by stressing that the previous bitcoin cycles were mainly motivated by the feeling of retail investors. But today, retail psychology may not be the main strength.

Instead, the Bitcoin price is now largely motivated by business and institutional investors.
This change makes it difficult to predict the duration of the duration of the institutional FOMO (fear of missing) or when it ends. There is no history precedent to use as a comparison.
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