Traders’ Fear Won’t Last Long: Bitcoin’s Return Above $117K Could Shift Market Sentiment

Fear and uncertainty are once again creeping into the crypto markets. According to analytics platform Santiment, traders have recently slipped into a more negative mood, deepening fear, uncertainty, and doubt (FUD). Yet history shows that when the crowd expects a major crash, reality often moves in the opposite direction. In its latest post on X, Santiment highlighted that the crypto market has been under the influence of negative sentiment for the past two weeks – a paradoxically encouraging sign. Analysts argue it’s unlikely that the feared massive selloff will actually occur.

Why a Turnaround Could Be Coming: The Fed and Interest Rates One of the key factors that could bring markets back to a positive trajectory is the anticipated interest rate cuts by the U.S. Federal Reserve. Financial institutions and market experts expect at least two cuts in 2025. Analysts believe this could serve as “another catalyst for positivity.” Pav Hundal, lead analyst at Australian brokerage Swyftx, emphasized that after a period of euphoria, the market is recalibrating with a healthy correction. He pointed out that their euphoria index clearly shows the last Bitcoin all-time high was driven by an overheated market. “The 30-day rolling performance of Bitcoin is now negative, which suggests the correction has already happened. From the $124,000 peak, the market flushed out weak positions,” Hundal noted.

$117K as a Psychological Threshold Investor mood is also influenced by the Fear and Greed Index, which moved back to “neutral” after lingering in “fear” and “greed” zones over the past month. According to Charlie Sherry from BTC Markets, extreme bearish sentiment often signals the end of a downtrend, not the beginning. “If Bitcoin reclaims $117,000, sentiment could shift back very quickly. We’ve already seen the first signs of this in the recent rebound,” Sherry explained. Long-term speculation continues about Bitcoin’s potential move toward $200,000, though that target still appears distant in both price and time.

A New Trend: Crypto Bonds Another factor that could boost optimism is the rise of crypto-denominated bonds. These instruments have triggered a race among companies to accumulate more digital assets. Recently, Forward Industries announced it had secured $1.65 billion in cash and stablecoins to launch a crypto strategy focused on Solana. “The Solana bond trade has potential. While yields may be lower than Ethereum’s, it’s a trend worth watching – one that could shift sentiment back to the positive,” Sherry added.

September Is Historically Weak – But Only Briefly September has historically been one of the weakest months for stock returns, a trend that also spills over into crypto. According to CK Zheng, co-founder and CIO of ZX Squared Capital, it’s natural for traders to remain cautious during this period. However, Zheng believes the current negative sentiment is only temporary. He says the shift will depend on factors such as inflation indicators (CPI and PPI) and the impact of tariffs imposed by President Donald Trump. In the past, crypto prices plunged immediately after tariff announcements and dropped again once they took effect.

Bottom Line The current wave of trader fear may just be a short-lived episode. If Bitcoin breaks back above $117,000 and the Fed cuts rates, sentiment could quickly reverse. Longer-term optimism is also supported by emerging trends such as crypto bond issuance. 👉 The real question is whether the market can sustain positive momentum despite geopolitical uncertainty and September’s historically weak performance.

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