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Bitcoin is still trading in the $105,000 range, staying within a narrow range and displaying faint indications of impending volatility. Despite the price's lack of momentum, social sentiment — a less common source — has produced a strong signal that could be the catalyst for Bitcoin's next significant breakout.
The most recent data from Santiment shows that the ratio of bullish to bearish comments on social media is currently at one of its lowest levels in months, with only 1.03% of comments being bullish and one being bearish. The last time sentiment was this bad was during the April 6 panic related to tariffs. Paradoxically, that signaled a local bottom and came before a significant bullish turn in the price of Bitcoin. In retail sentiment, fear, uncertainty and doubt (FUD) have historically served as contrarian indicators.
When traders start to give in emotionally, it usually means that the majority of selling has already taken place or is almost finished. That is consistent with the current technical chart, which displays Bitcoin in a traditional consolidation triangle wedged between its 26 EMA and a descending resistance trendline. Bitcoin has been consolidating following a robust rally that saw it rise quickly from below $90,000 to over $110,000.
Instead of exhibiting structural breakdown, the current price action appears to be a healthy consolidation before the next significant move. The macro setup continues to be bullish, with long-term moving averages trending upward and support levels holding. In order to prevent a fresh run toward past highs, traders should closely monitor a breakout above $108,000.
Conversely, short-term downside risks could rise if Bitcoin breaks out of the $102,000-$104,000 support cluster. However, with fundamentals strong and sentiment scraping the bottom, the contrarian signal is obvious: Bitcoin may be preparing for yet another significant leg upward.
Vladislav Sopov
U.Today Editorial Team