Bitcoin Sentiment Reaches Peak Bearishness at Recent Lows

Bitcoin's sentiment has been on a rollercoaster ride in recent weeks, with peak bullishness hitting at the highs and peak bearishness reaching new lows. According to Santiment data covering May 21 through June 4, investors became more optimistic when prices were high and more pessimistic when prices were low. This inverse relationship between sentiment and price is unusual, as investors typically become more confident when markets are strong and vice versa.

The current risk picture remains uncertain, with global equities experiencing a downturn due to declining investments in artificial intelligence (AI) companies. The South Korean KOSPI index has fallen 4.7%, and the Indonesian rupiah is at a multi-year low as capital flees emerging Asia. Meanwhile, U.S. spot bitcoin ETFs ended a 13-day outflow streak with a small $3.05 million inflow, while spot ether ETFs ended their parallel 17-session streak with $19.30 million.

The upcoming Friday's U.S. nonfarm payrolls report is a key catalyst for market movements. A soft print could revive Federal Reserve interest-rate cut expectations and boost risk assets, while a hot print may extend the downturn. Bitcoin traders will also be watching how the cryptocurrency behaves at the $60,000 round number if it gets tested before the data lands.