A significant divergence is forming, one that you should keep an eye on.
After a powerful almost 25% weekly increase, Bitcoin’s price peaked at the level of almost $79k, pushing short-term holders (STHs) deeper into profit. Against this backdrop, BTC’s 1% intraday pullback could point to a supply zone forming near $80k, as some STHs took profits off the table.
Bitcoin’s Fear & Greed Index is the one exposing this divergence. As the chart below shows, the index closed the week more than 9% lower from the 70-level, moving away from the “Greed” territory even as BTC remains close to its recent highs.
To summarize, the divergence between price and sentiment, although still short-term, has caught analysts’ attention, raising speculation about a potential manipulation tactic developing underneath Bitcoin’s [BTC] price action.
In this context, the pullback in the index could signal cooling sentiment.
And yet, the cooldown appears to have had little effect on demand. In fact, ETFs have bought the lion’s share of BTC in the past few days, and the on-chain spot bids forming around $80k are still holding up.
This raises the question: Are bigger players “deliberately” cooling sentiment to shake out weak hands before a potential move back above $82k?
Bitcoin’s sentiment divergence could signal a September rally
Reinforcing this bearish scenario is also the Bitcoin Fear & Greed Index.
In the chart above, the indicator can be seen to reverse and shoot higher by more than 15% within just 24 hours, entering the “Greed” category even deeper than ever before.
This development only further confirms the likelihood of large funds manipulating the price in order to create FOMO around the cryptocurrency and cause a rally.
As history has shown, it is at the peak of euphoria that Bitcoin tends to top. Therefore, it is highly plausible that the price will encounter resistance around $82k in the short term, considering that the F&G Index only needs to register six more points to enter the “extreme greed” territory.
Against this backdrop, another such divergence could also present itself in the future.
As long as the underlying demand remains strong, Bitcoin should be poised for a strong early September jump that would put it on track for a potentially fourth straight bullish September. This makes the divergence a key signal to watch.
If big money is keeping the enthusiasm from overshooting, it means that Bitcoin has room to grow further before another round of speculative euphoria takes over the market.
Final Summary
- Bitcoin’s price and sentiment are diverging; BTC is near $80k while the Fear & Greed Index shifts sharply.
- A September rally may be coming. Strong demand could help BTC shake out weak hands and move above $82k.
