In recent weeks, bitcoin sentiment has been most bullish when the price was highest and most bearish exactly when it was most stressed, according to Santiment data covering May 21 through June 4.
Peak bullishness hit on May 22, with bitcoin near its high of $78,000 for the period. The most bearish came June 3, with bitcoin near the low. While sentiment is not a timing tool, peak conviction at the highs and peak fear at the lows is the inverse of where the trade usually pays.
Bitcoin was recently trading near $62,400, down about 20% from the late-May peak. The risk picture has cracked alongside it.
The investments into artificial intelligence (AI) companies that pulled global equities to record highs this year has stalled after Broadcom's chip forecast fell short of expectations. South Korea's KOSPI index fell 4.7%, and the won and Indonesia's rupiah are at multiyear lows as capital flees emerging Asia.
U.S. spot bitcoin ETFs ended a 13-day, $4.4 billion outflow streak on Thursday with a tiny $3.05 million inflow. Spot ether ETFs ended their parallel 17-session streak with $19.30 million on the same day. Both numbers are too small relative to the streaks they ended to call it a regime change.
Friday's U.S. nonfarm payrolls report at 8:30 a.m. ET is the binary catalyst. A soft print revives Federal Reserve interest-rate cut expectations under new Chair Kevin Warsh and likely takes risk assets back up, while a hot print may extend the unwind.
And keep an eye on how bitcoin behaves at the $60,000 round number if it gets tested before the data lands. Stay alert!
Read more: For analysis of today's activity in altcoins and derivatives, see Crypto Markets Today . For a comprehensive list of events this week, see CoinDesk's "Crypto Week Ahead."
The chart shows weekly changes in bitcoin's market capitalization relative to an index of altcoins that excludes the 10 largest tokens.
Bitcoin has underperformed for several weeks as the altcoin measure became stronger, and the ratio recently tested a resistance level that has persisted for over a year.
If declines in zcash, hyperliquid and near continue, the chances are that it will drop further back.