During the recent rebound of Bitcoin, a market sentiment indicator tracked by analyst Darkfost from CryptoQuant once rose above 89, reaching the highest level since March 2024, and briefly entered the "extremely greedy" zone. Subsequently, the indicator fell back, and market sentiment cooled down from its high levels.

After reaching a high level, emotions fall back down.

Darkfost indicates that this reading reflects the comprehensive sentiment indicator he is tracking, and it is not equivalent to the current level of all crypto market sentiment indices. The article mentions that such extreme optimistic or pessimistic readings often appear near market turning points, therefore they are worth paying attention to, but this does not mean that Bitcoin has confirmed a reversal.

For comparison, the Fear & Greed Index of Alternative.me was 63 at the time of this article's statistics, which falls within the "greedy" range. The index was 56 the day before and 73 a week prior, while it was 29 a month ago. These two indicators measure different aspects: the former focuses on the periodic high points of the model tracked by Darkfost, whereas the latter provides a closer snapshot of current market sentiment.

Bitcoin still hasn't managed to stabilize above $80,000

Price movements also provided a backdrop for the decline in sentiment. CoinGecko data shows that Bitcoin fluctuated between $76,400 and $79,600 within 24 hours, before returning to around $77,300, still below the previous test level of $80,000.

crypto.news Previous analyses have suggested that before the Federal Reserve's next interest rate decision, Bitcoin may continue to be limited below $82,000. CoinEx Chief analyst Jeff Ko mentioned that the range of $78,000 to $79,000 serves as a support area, while there is resistance above $82,000. As the price subsequently fell below $78,000, that previous support level was actually tested.

US spot ETF saw a net outflow of $463 million this week.

Changes have also occurred in the funding situation. According to Farside data, US-listed spot Bitcoin ETF saw a total net outflow of $462.7 million during the trading week from September 8 to 11, with net outflows recorded on all four trading days. In the week prior, such products had attracted a net inflow of approximately $986.9 million, with a cumulative inflow of about $3.8 billion over three consecutive weeks.

ETF Capital flow and sentiment indicators reflect different dimensions. The former tracks the subscription and redemption of fund shares, while the latter is used to observe changes in market sentiment. Neither can explain price fluctuations on a single day by itself, but together they indicate that the market tends to be cautious near high levels.

Market turns cautious ahead of the Fed meeting

Macroeconomic data is also affecting market expectations. Data on consumer prices for August, released by the U.S. Bureau of Labor Statistics on September 11, showed that the overall CPI rose 3.4% year-on-year, unchanged from July; the core CPI (excluding food and energy) rose 0.3% that month and 2.4% year-on-year.

The next policy meeting of the Federal Reserve is scheduled to take place from September 15th to 16th. Before the results of the meeting are announced, several key signals that are currently concerning the market include a decline in Bitcoin sentiment indicators, ETF funds turning negative, and the price failing to return above $80,000.