Bitcoin and altcoins experienced a challenging start to November. Bitcoin's price dipped below $100,000, and Ethereum (ETH) recorded its largest single-day loss.
While there were growing expectations that Ethereum might fall below the $3,000 mark, a recent price recovery has unexpectedly altered the outlook for ETH.
Investor Sentiment Shifts Dramatically
The analytics platform Santiment has reported that Ethereum investors are now displaying an optimistic attitude towards ETH following its recent price recovery.
Consequently, Ethereum investors have transitioned sharply from an extremely bearish stance to an extremely bullish one within a matter of days.
Santiment noted that a sense of FOMO (Fear Of Missing Out) has returned to the Ethereum market. However, the platform cautioned that this situation could potentially hinder further price acceleration.
Historical Market Trends and ETH's Future
According to Santiment, market prices often move in the opposite direction of the crowd's prevailing expectations. This suggests that ETH's downward trend might persist for a while longer, despite the sudden surge in investor optimism.
Ethereum investors quickly shifted from extreme pessimism to optimism. However, prices historically move in the opposite direction of popular expectations.
This means market optimism could lead to a short-term correction in ETH.
Santiment argued that the abrupt change in sentiment surrounding ETH does not represent a genuine bullish signal or a strong buying opportunity. The platform indicated that a true buying signal would emerge when investors begin to abandon their expectations of a rapid recovery and the anticipation of a return to $4,000 diminishes.
“Follow the ETH chart and wait for investors to temper their expectations of a quick return to $4,000. Once the bullish sentiment calms down again, that will be a real buy signal.”