Crypto market sentiment has returned to neutral as markets showed signs of recovery on Thursday following a brief dip into the “fear” zone when Bitcoin fell to $112,000 a day earlier. 

However, analysts have been quick to warn that more volatility lies ahead. 

Bitcoin (BTC) fell to $112,350 on Coinbase in late trading on Wednesday, marking a 10% correction from its August peak of just over $124,000, and tipping the Bitcoin Fear & Greed Index to 44, its lowest level in two months.

However, it has started to recover since, reclaiming the $114,500 level during early trading on Thursday, according to TradingView, which has resulted in improved sentiment. The index has now shifted back to neutral, with a rating of 50.

“As anticipated, crypto markets have begun to rebound,” said blockchain analysts at Santiment, who cautioned, “watch for more FUD” and “markets move opposite to crowd’s expectations.”

Santiment also specified several crypto assets that were showing a rising level of social interest, including Bitcoin, Tether (USDT), XRP (XRP), Cardano (ADA), and an obscure memecoin called SNEK. 

Sentiment flickers like a flame

“One of the most hilarious aspects of Bitcoin is sentiment. It flickers like a flame. One moment euphoria, moments later panic. Many Bitcoin have exchanged hands through such emotions,” said Bitcoin entrepreneur and President Trump’s crypto adviser David Bailey, who advised zooming out and staying focused. 

Related: Retail went from bullish to ‘ultra bearish’ as Bitcoin dipped to $113K

“Crypto prices treaded water over the past week as macro factors added near-term headwinds,” Augustine Fan, head of insights at crypto trading software service provider SignalPlus, told Cointelegraph. 

She added that US Treasury Secretary Scott Bessent “disappointed observers by stating that the government is not going to purchase any more BTC for its Strategic Bitcoin Reserve,” though Bessent appeared to backtrack those remarks in an X post hours later.

Total market capitalization has recovered to reach $3.96 trillion following a 2% gain over the past 24 hours; however, more volatility may lie ahead this week. 

All eyes on Fed chair’s speech at Jackson Hole  

Investors are eagerly awaiting Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole conference on Friday, which has historically moved markets.  

“Markets brace for Jackson Hole as Powell’s tone could jolt equities and crypto,” stated Bitcoin solutions provider BitGo on Wednesday. 

The markets have been front-running the prospect of Powell hinting at no rate cuts in September, but if he “comes in soft and leans that rate cuts are likely, we turbo rip,” commented author Jason Williams on Wednesday. 

“Jackson Hole will shape crypto’s direction moving forward,” said CNBC trader Ran Neuner before adding, “Trump is pushing for a rate cut with good reason… But will Powell listen?”

The prediction futures-based CME Fed Watch tool currently forecasts an 82% chance of a rate cut on Sept. 17, though the figure has been falling. 

Magazine: Solana Seeker review: Is the $500 crypto phone worth it?

Santiment has revealed that the Bitcoin ETF streak is still going strong, with only one day of outflows recorded in the last 17 trading days.

This comes as analysts say the steady stream of money into the investment vehicles is helping drive Bitcoin prices higher.

Sustained ETF Demand

According to data shared by Santiment on X, since June 6, there has only been one day with more money leaving than coming into these products. The market intelligence platform also said that this ongoing trend is a positive sign for the future of Bitcoin and the wider crypto market.

As of July 7, information from Farside Investors shows that U.S. spot Bitcoin ETFs recorded a net flow of $216.5 million across all issuers. BlackRock’s iShares Bitcoin Trust (IBIT) led with $164.6 million in inflows, followed by Fidelity’s (FBTC) with $66 million.

ARK Invest’s (ARKB) and Grayscale’s GBTC saw outflows of $10.1 million and $10.2 million, while other ETFs, including Bitwise’s BITB, VanEck’s HODL, Valkyrie’s BRRR, and WisdomTree’s BTCW, recorded no activity for the day.

This follows a major net outflow of approximately $342 million experienced on July 1, which marked the first negative movement since June 6. Before this, there had been a 15-day streak that had brought in nearly $4.7 billion. This period of sustained demand had also pushed cumulative net inflows to about $49 billion and total ETF assets under management (AUM) to above $131 billion.

Bullish Price Predictions

So far, spot Bitcoin ETFs have brought in over $14.4 billion this year, including $4.5 billion just in July. Fueled by increased institutional demand, Bitcoin’s price outlook for July 2025 has turned increasingly bullish as analysts project fresh highs based on the record ETF inflows.

Markus Thielen, head of research at 10x Research, has projected a rise in Bitcoin’s price to $116,000. He identified strong capital injection into spot Bitcoin ETFs as the main driver behind the outlook.

 “These flows are increasingly outpacing price action, signaling institutional demand driven more by macro concerns than short-term momentum,” he said.

On June 30, Bitwise CIO Matt Hougan and head of research Ryan Rasmussen published a report confirming their $200,000 price target for Bitcoin in 2025. They pointed to historical trends, noting that the flagship cryptocurrency reached a new all-time high of $112,000 in May, supported by record ETF inflows.

The report also highlighted increasing interest from Bitcoin treasury companies and the formation of a U.S. strategic Bitcoin reserve as bullish factors. Hougan and Rasmussen showed further confidence in strong ETF inflows continuing into the second half of the year.

Bitcoin’s record-breaking rally last week collided headfirst with geopolitical turbulence, as U.S. President Donald Trump returned to making tariff threats, this time aimed at the European Union (EU).

The move injected volatility into a market fresh off its all-time high (ATH) after BTC came within a couple of hundred bucks of flying past $112,000. It has since wobbled, trading sideways around $109,500 as traders weigh the implications of escalating U.S.-EU trade tensions.

Tariff Whiplash

In early April, the price of BTC dropped to about $82,000 after Trump announced a raft of tariff measures impacting multiple U.S. trade partners. The president claimed the new taxes were needed to correct deficits between the United States and other countries. At the time, the EU was hit with a 20% tax on exports to the U.S.

Days later, Trump was at it again, hiking levies against Chinese imports to 104%. His actions pushed BTC prices even lower, with the cryptocurrency dipping to $74,600 and wrecking crypto trades worth more than $287 million.

However, after about 24 hours, the White House announced that more than 75 countries had contacted the U.S. for tariff negotiations, prompting Trump to lower the taxes to 10%, although products from China suffered an increase to 125%. The good news gave Bitcoin a leg up to around $82,000 from around $77,000.

As the first week of May closed, news emerged that the U.S. and China were planning high-level trade talks to iron out their differences. The reports stirred BTC into action, helping push it past $97,000 from a low of $94,000.

Soon after, it went past $100,000, buoyed by easing geopolitical tensions, exchange-traded fund (ETF) inflows, and increased institutional demand. On May 22, the king cryptocurrency recorded a new ATH, with market watchers expecting it to move on to the next milestone quickly.

However, once again, Trump threw a spanner in the works, announcing a 50% tariff on EU goods on May 23 due to stalled negotiations. BTC promptly tumbled 4% to $107,500, dragging altcoins like Monero (XMR) and Hyperliquid (HYPE) down 5.5% and 3.5%, respectively.

Social media sentiment, tracked by analytics firm Santiment, mirrored the panic, with retail traders fleeing altcoins and “tariff” mentions spiking 300%, the largest surge since April’s market correction.

Yet the selloff proved short-lived. By May 25, the American president paused the tariffs, citing ongoing talks. BTC responded soon after, clawing back to $109,500 per CoinGecko data.

July 9: The Next Inflection Point

Santiment said in a May 27 blog post that this “threat-then-delay” tactic, a hallmark of Trump’s trade strategy, has kept markets oscillating between fear and cautious optimism.

For investors in crypto, where volatility is already baked into the landscape, this adds another layer of unpredictability,” noted analyst BrianQ “It’s hard to deny that digital assets are way more intertwined with global macro trends than they were a decade ago, back when crypto felt like a true free-for-all.”

With the next tariff decision now delayed until July 9, Bitcoin’s near-term trajectory is hostage to geopolitics. If Trump proceeds, the fallout could cascade across equities, currencies, and yes, crypto. Until then, digital asset traders are caught between technical optimism and political unpredictability.

Ethereum (ETH) has roared back into the spotlight with a vengeance, surging over 49% in just 6 days to briefly flash past $2,700, a price point not seen since February 23.

The rally, which began on May 7 after ETH bottomed near $1,800, has reignited talk of the long-dormant “flippening” narrative, in which Ethereum could overtake Bitcoin (BTC) in market capitalization.

From FUD to FOMO

According to a May 13 report from Santiment, Ethereum’s six-day run, which took it from under $1,800 to over $2,700, marked one of the sharpest rebounds in recent memory and triggered a dramatic shift in sentiment.

Analyst Brian Q partly attributed the turnaround to crypto’s deeply irrational crowd behavior. He noted that just a week ago, social media was rife with jokes about Ethereum’s underperformance, with bearish price calls for ETH dominating online conversations between May 6 and 7 as the asset lagged behind rivals.

However, once the rally started on May 8, the mood flipped dramatically, as retail traders scrambled to justify entry points, with some speculating on the altcoin going to $3,500 and beyond.

“We can really see how price calls across social media have done a complete 180 as doubters have been silenced by Ether’s rally,” wrote Brian Q.

Santiment also noted how years of underperformance had conditioned the market to dismiss Ethereum, only for the world’s second-largest cryptocurrency by market cap to pump when least expected.

“With dismissal from the crowd,” the report stated, “comes massive pumps that blindside the doubters.”

Institutional Moves and On-Chain Signals

Interestingly, the rally coincided with aggressive accumulation by some institutional players. On-chain tracker Lookonchain reported that in the last week, London-based Abraxas Capital bought 242,652 ETH worth some $561 million, with 185,309 ETH valued at $400 million plucked from exchanges in just 72 hours.

Experts say ETH’s price action is more than just a short squeeze, with analyst Rekt Capital pointing out that the cryptocurrency closed last week at $2,514, officially reclaiming its macro $2,200 to $3,900 range lost in the first quarter of 2025.

“Any dips, if needed at all, would only solidify $2,200 as range-low support,” he wrote on May 12, while also highlighting the asset’s attempts to fill a macro CME gap between $2,900 and $3,350.

Adding to Ethereum’s strength is the surprisingly low network fee environment. Previously, Santiment noted that average transaction fees remain around $0.84, well below the $7+ seen six months ago, removing a common barrier to adoption.

However, cautious voices have warned that the current trading zone between $2,400 and $2,700 could be a consolidation phase before the next leg up or a possible shakeout. According to Daan Crypto Trades, if momentum falters, there may be a possible retest down to $2,300 or even $2,100.