Santiment Says Crypto Market Euphoria May Signal Market Top

Crypto markets may be peaking as social media chatter around potential Federal Reserve rate cuts hits an 11-month high, Santiment said.

Keywords like “Fed,” “rate,” and “cut” have dominated discussions, reflecting unusually high investor optimism, said Santiment, which tracks crypto market sentiment.

“Historically, a massive spike in discussion around a single bullish narrative can indicate that euphoria is too high and may signal a market top,” it said in its “This Week in Crypto” report. “ETH is just inches away from its historic peak, but on-chain data shows its valuation is entering a “danger zone,” signaling potential for a pullback. Despite price stability, the amount of Bitcoin held on exchanges is rising, a trend that has historically preceded selling pressure.”

Powell Hints At Possible Rate Cuts

Santiment’s report comes after Fed Chair Jerome Powell said during a speech at Jackson Hole on Friday that the “shifting balance of risks may warrant policy adjustments,” boosting optimism over a rate cut next month. 

Traditional and crypto markets surged after Powell’s comments. 

Ethereum reached an all-time high (ATH) on crypto exchange Coinbase, while Bitcoin managed to recover back above the $115k mark again. 

Happy ETH all time high to all those that celebrate!

— Brian Armstrong (@brian_armstrong) August 22, 2025

The rally, according to Santiment, was the markets pricing in the potential stimulus in a clear “buy the rumor” scenario.

The crypto market has since undergone a slight pullback, with the sector’s market capitalization dropping a fraction of a percent in the last 24 hours to back below $4 trillion as of 1:38 a.m. EST.

Crypto market overview (Source: CoinMarketCap)

During that period, Bitcoin slid below $115K to trade at $114,908, while Ethereum trades at $4,782.61 after a minor increase.

Bitcoin And Ethereum Showing Weak On-Chain Metrics, Says Santiment

Despite the market optimism, Santiment says Ethereum and Bitcoin are showing fairly weak on-chain metrics.

Bitcoin is showing ”worrying on-chain signs,” it said, with daily active addresses and transaction volumes having ”cooled off,”  

The long-term MVRV ratio, which measures holder profitability, sits at +18.5%, indicating a “slightly risky zone for new long-term investments,” Santiment said. 

An uptick in the amount of BTC on exchanges has surged by nearly 70,000 since June, it said, a shift that “can indicate that more holders are positioning themselves to sell.”

Ethereum’s MVRV also “signals a need for caution” even amid ETH’s exciting recent price jump, it said.

Ethereum’s short-term (30-day) MVRV is approaching +15%, a level identified as a “danger zone” that usually leads to pullbacks for altcoins. 

“Even more striking is the long-term MVRV at a very high +58.5%, increasing the risk of profit-taking,” Santiment said.

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