Market expectations for Bitcoin to hit new all-time highs may ironically delay such a rally in the near term—but that doesn’t mean Ether won’t deliver a surprise, according to analysts.
Speaking to Cointelegraph on Wednesday, Santiment analyst Brian Quinlivan noted, “We’re seeing growing anticipation for Bitcoin’s next all-time high across social media. Since markets often move against retail sentiment, this typically signals we’re not quite ready for another major bullish breakout yet.”
Bitcoin’s “Frustrating” Near Breakouts Could Set the Stage for a Sharp Upswing
Quinlivan noted that when investor confidence is high and doubt is minimal, new all-time highs often fail to materialize. However, with Bitcoin repeatedly nearing its record, sentiment has cooled enough to potentially fuel a breakout above its current peak.
At the time of publication, Bitcoin is trading at $109,679—just 2.1% below its all-time high of $111,970, reached on May 22, according to CoinMarketCap.
“It wouldn’t be surprising to see a breakout shortly after a few more frustrating ‘close calls’ that shake out small traders and dampen overly bullish sentiment,” said Quinlivan.
The Crypto Fear and Greed Index currently sits at 72 out of 100, signaling a “Greed” sentiment in the market.
Meanwhile, Dr. Sean Dawson, head of research at Derive, told Cointelegraph he expects Bitcoin to “likely underperform” in the third quarter of the year.
Q3 Has Historically Been Bitcoin’s Weakest Performing Quarter
Since 2013, the third quarter has consistently been Bitcoin’s weakest, with an average return of just 6.03%, while the fourth quarter has historically delivered the strongest performance, averaging gains of 85.42%, according to CoinGlass data.
Dr. Sean Dawson of Derive pointed to macroeconomic uncertainty as a major factor weighing on sentiment. “Despite political pressure to lower rates, the Federal Reserve appears set to maintain current interest rates, which could reduce Bitcoin’s appeal for outsized returns,” he explained. The CME’s FedWatch tool shows a 99.9% expectation that the Fed will hold rates steady at 4.25% to 4.50% on June 18.
While doubts surround Bitcoin’s short-term outlook, optimism is rising around Ethereum. “More and more attention is shifting to Ethereum,” said Santiment’s Brian Quinlivan, noting that the asset has been “playing catch-up since markets started recovering in mid-April.” After hitting a low of $1,472 on April 9, Ether has rebounded to $2,793 as of publication, according to CoinMarketCap.
“Bitcoin’s surge in recent months has helped trigger profit rotation, giving other assets room to rise,” Quinlivan explained. “It only became apparent when Ethereum hit peak bearish sentiment a couple of months back.”
Meanwhile, Dr. Sean Dawson noted that overall crypto trading activity may dip in the near term as summer sets in across the Northern Hemisphere, with many investors stepping away for vacations.
“This seasonal slowdown increases the likelihood of sideways price action or even sharp pullbacks, as traders lock in profits from earlier rallies,” he said.
