Crypto sentiment holds steady as Bitcoin drops to $105K

Crypto market sentiment has held steady despite Bitcoin tumbling almost 2% over the past day to change hands close to the $105,000 price level.

The sentiment-tracking Crypto Fear & Greed Index  posted  a “Greed” score of 63 out of 100 on Wednesday, slipping one point from Tuesday, as Bitcoin pulled back 1.79% in a drop to $105,560 after nearly reaching $108,000 the previous day, according to CoinMarketCap data.

Sentiment strong leading into historically poor Q3

Crypto analysts have speculated when Bitcoin might retest its all-time high of $111,970 reached on May 22. Optimism was high on Monday as its price hovered just below $109,000, before slipping into another short-term downtrend.

Some analysts noted that the third quarter, which began on July 1, is typically a weaker period for Bitcoin. 

“From the historical data, this quarter is generally the slowest out of all, for both $BTC and $ETH,” crypto trader Daan Crypto Trades  said  on Tuesday.

Since 2013, Bitcoin has averaged a 5.47% gain during the third quarter each year,  according  to CoinGlass. If that trend holds, it would place Bitcoin’s price around $111,000 on Sept. 30 — just shy of its all-time high of $111,970.

Daan said the weaker performance during the quarter is due to the “slower summer months where there’s generally less action, volumes [and] liquidity.”

Bitcoin’s Q2 performance matched average gain

Bitcoin closely matched its historical average performance during the second quarter, which ended June 30, posting a 31% gain at $108,383 — approximately 4% above the 27% average Q2 return since 2014. However, Bitcoin  ended the month of June  with its highest monthly candle.

Other indicators signal that the market is still heavily favoring Bitcoin. Bitcoin dominance is sitting around 65.5%, up nearly 13% so far this year,  according  to TradingView. 

Meanwhile, CoinMarketCap’s Altcoin Season  Index , which bases the performance of the top 100 altcoins relative to Bitcoin over the past 90 days, is sitting at a “Bitcoin Season” score of 20 out of 100.

However, CryptoQuant's head of research, Julio Moreno,  said  on Wednesday that CryptoQuant’s Bitcoin Bull Score Metric has declined to a level of uncertainty.

“Bitcoin Bull Score is in NEUTRAL territory now– 50. Needs to be 60 or above for prices to sustain a rally,” Moreno said.