Ethereum traders have rapidly shifted from an overwhelmingly negative outlook to a bullish one in just a few days. This change is attributed to heightened interest as Ethereum approaches the $3,500 mark. However, recent data from Santiment indicates that such enthusiasm might lead to disappointment down the line.

ETH Trader FOMO

Santiment highlighted that this sudden enthusiast trend reflects a pattern observed earlier in the week when panic selling from retail investors unexpectedly fueled a price rebound. Similarly, the influx of optimistic sentiments now could impede ongoing price gains.

Data suggests that the market often reacts contrary to the prevailing sentiment; neutral outlook phases tend to signal stronger buying opportunities than euphoric moments. Notably, trader Ted Pillows remarked that the recent uptick in ETH prices, while promising, is primarily driven by the winding down of short positions rather than new investments. He suggested that Ethereum needs to stabilize within the $3,600-$3,700 range to confirm a solid recovery and lessen the risk of a downward trend.

Broader Market Dynamics

Despite the uncertainty lurking in the short term, some analysts believe there’s still potential for significant future gains. Trader Tradigrade pointed out that Ethereum’s monthly performance is forming a large Inverse Head and Shoulders pattern, forecasting a price target upward of $14,000 once confirmed.

“Wet Blanket” Perception

Mike Novogratz, the CEO of Galaxy, shared his view that the current market sluggishness might stem from long-term holders re-evaluating their assets and diversifying following an extended bullish run. While he perceives this behavior as a healthy adjustment for the market’s future, it currently casts a pall over prices.

“I do not think we have seen cycle highs. I think by year-end, we (will) see a new Fed chair, and he will be far more dovish than markets are used to. Hopefully, that gives enough narrative to propel the next leg higher.”