Crypto market sentiment has returned to neutral as markets showed signs of recovery on Thursday, following a brief dip into the “fear” zone when Bitcoin dropped to $112,000 a day earlier.
Analysts, however, caution that volatility may not be over.
Bitcoin (BTC) fell to $112,350 on Coinbase in late Wednesday trading, a 10% correction from its August peak of just over $124,000, pushing the Bitcoin Fear & Greed Index to 44—its lowest point in two months.
Since then, BTC has regained ground, climbing back to around $114,500 in early Thursday trading, according to TradingView, which helped push the index back to neutral with a reading of 50.
“As expected, crypto markets are starting to rebound,” said blockchain analysts at Santiment, who warned that investors should “watch for more FUD” and remember that “markets often move opposite to the crowd’s expectations.”
Santiment also highlighted several crypto assets seeing increased social interest, including Bitcoin, Tether (USDT), XRP, Cardano (ADA), and a lesser-known memecoin called SNEK.
Sentiment flickers like a candlelight
“One of the most amusing aspects of Bitcoin is sentiment—it flickers like a flame. One moment there’s euphoria, the next panic. Countless Bitcoins have changed hands driven by these swings,” said Bitcoin entrepreneur and former President Trump’s crypto adviser, David Bailey, who recommended taking a long-term view and staying focused.
“Crypto prices largely treaded water over the past week as macroeconomic factors created near-term headwinds,” Augustine Fan, head of insights at crypto trading software provider SignalPlus, told Cointelegraph.
Fan also noted that US Treasury Secretary Scott Bessent “disappointed observers by stating the government will not purchase any more BTC for its Strategic Bitcoin Reserve,” though Bessent appeared to soften that stance in an X post hours later.
The total crypto market capitalization has rebounded to $3.96 trillion after a 2% gain over the past 24 hours, though analysts warn that heightened volatility could return in the coming days.
Markets turn attention to Fed chair’s Jackson Hole speech
Investors are closely watching Federal Reserve Chair Jerome Powell’s upcoming speech at the Jackson Hole conference on Friday, a historically market-moving event.
“Markets are bracing for Jackson Hole, as Powell’s tone could jolt equities and crypto,” said Bitcoin solutions provider BitGo on Wednesday.
Markets have been pricing in the possibility that Powell may signal no rate cuts in September. However, author Jason Williams noted, “If he comes in soft and hints that rate cuts are likely, we could see a major surge.”
“Jackson Hole will help shape crypto’s trajectory,” CNBC trader Ran Neuner added, noting, “Trump is advocating for a rate cut for good reason… but will Powell heed it?”
The CME FedWatch tool currently predicts an 82% chance of a September 17 rate cut, though the probability has been declining.
