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Bitcoin Back Above $63,000: Will FOMO Fuel Another Rally Or Lead To A Bust?

The Bitcoin price made a strong comeback on Friday after witnessing a significant amount of bearish pressure throughout the past week. On Wednesday, May 1, the premier cryptocurrency fell below the $60,000 mark for the first time in almost two months.

On Friday, May 3, the price of BTC recovered above the $60,000 level, going as high as $63,000 in the past day. However, the question is – can the Bitcoin price enjoy a sustained rally following this latest resurgence?

How Long Will The BTC Price Rally Last?

In a recent post on the X platform, Santiment pointed to a shift in investors’ position and sentiment on the Bitcoin price following the recent surge above $62,000. According to the on-chain analytics site, traders on the Binance platform are “going from liquidated shorts to longs” after the latest price increase.

While this shift in sentiment might signal renewed optimism in the premier cryptocurrency, Santiment sounded a warning bell for enthusiasts watching the Bitcoin price and looking to get into the market. The blockchain firm said in its post: 

For the rally to continue, we don’t want to see FOMO rising too much higher than what it appears to be now.

Bitcoin Price

FOMO, or “fear of missing out,” is a phenomenon where investors hastily purchase in-demand assets out of fear of missing out on potential gains. While it can drive the asset to a higher price in the short term, excessive FOMO often results in unsustainable bullish trends and subsequent downturns.

What’s more, crypto prices tend to move in the opposite direction of the crowd’s expectations. Hence, if the majority of traders are betting on the Bitcoin price to rise, there is a great likelihood that the cryptocurrency’s value will experience a drop.

Behind The Bitcoin Price Surge

As of this writing, the Bitcoin price stands at around $62,871, reflecting a substantial 6% increase in the last 24 hours. Although the catalyst for this latest Bitcoin rally remains unclear, on-chain data shows that recent whale activity might have triggered the bullish momentum.

In a recent post on X, CryptoQuant CEO and founder Ki Young Ju revealed that Bitcoin whales acquired 47,000 BTC in a single day. Ju also said that while this class of investors might have included ETF-associated addresses, the recent spike in “balances for whale addresses” is not ETF-related.

Bitcoin price

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Buy High, Sell Low: FOMO Made This Crypto Trader Lose 6,039 SOL

Cryptocurrency traders constantly look for the next big project to yield significant profits. However, not all of their investments result in massive gains.

A recent report by Lookonchain revealed that a trader lost more than $1 million within three days.

When Buying High Doesn’t Result In Selling Higher

According to the blockchain research platform Lookonchain, a crypto trader lost 6,039 SOL over the last three days after FOMO-buying a memecoin. Per the report, the trader bought Slerf (SLERF) for 4,958 SOL, worth around $1 million.

The different transactions occurred when the price hovered between $0.8 and $1.4 on its launch day. A couple of hours later, the trader sold its SLERF tokens, losing 2,793 SOL after the token’s price plunged to the $0.4-$0.6 range, for a loss of $564,000.

Seemingly, the fear of missing out made the trader buy SLERF a second time when the price neared its all-time high (ATH) of $1.30. The address bought 3 million Slerf at $1.17, spending 19,133 SOL, worth around $3.152 million.

At the time, the pending question was whether the trader would profit from this second attempt or lose more money. As Lookonchain reported, the FOMO buyer sold all their SLERF tokens at a loss again, losing 6,039 SOL, worth $1.15 million.

The Slerf token, which has been all over the news for its dramatic launch, saw a significant price decrease of 52.39% from the ATH registered the day after launch. At writing time, SLERF is trading at $0.6351, an 18.4% decrease in the past 24 hours.

A second trader lost 3,731 SOL, worth $775,000, just one hour after buying 790,236 SLERF at its ATH price. The trader then doubled down on its bet and bought another 650,000 SLERF. Unluckily, the token’s price plummeted after both purchases.

Is The Crypto Presale Meta Hand In Hand With FOMO?

To paint an even bigger picture, another crypto trader lost money yesterday after buying a different ‘presale meta’ memecoin. Although the figures are more modest than the other two cases, this trader bought SMOLE and lost 371 SOL. Later, the address spent 2,549 SOL to buy SLERF.

SMOLE, despite only being out for one day, has already seen massive criticism and a 17.1% price drop. At writing time, the memecoin is changing hands at $0.0001499, a 70.39% decrease from its highest price of $0.0005086.

As this might suggest, FOMO seemingly drives memecoin traders’ decisions during this presale meta. The trend has seen hundreds of millions of dollars sent to memecoins, most of which report millions in losses for investors.

Despite experienced traders being able to profit from this trend, the current numbers hint at a considerable amount of traders losing massive figures while trying to catch the next memecoin to go “turbo parabolic,” even if it doesn’t have a long-term roadmap.

SOL, SOLUSDT, Crypto, Solana, Slerf, Smole

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Cardano Rises $56% To Dominate Weekend’s Top 10 Roster – Details

Altcoins such as Cardano (ADA) had a widespread increase in value, similar to the altcoin cycle observed in early November. This cycle occurred when the momentum of Bitcoin slowed down, prompting traders to secure profits and allocate their investments towards smaller cryptocurrencies.

Because of the consistent price of Bitcoin (BTC), which encouraged capital rotation to alternative coins, native tokens associated with layer 1 (L1) blockchains saw the greatest gains on Saturday. Cardano (ADA) was the top performer in the weekend’s top 10 rankings.

According to Coingecko data, ADA price increased by 27% to 64 cents in the last day, for a strong 56.3% growth over the previous seven days. It is the largest increase since August 2022.

With the removal of the three major obstacles—the $0.40, $0.45, and $0.50—investors may begin to experience FOMO, or “fear of missing out,” as they discover ADA to be a compelling investment.

Cardano Bullish Momentum Sparks Optimism

No doubt, Cardano has emerged as one of the most appealing assets available on the cryptocurrency scene, attracting interest as traders fervently hope that the current bullish trend holds or if they are in for a startling letdown.

The money flow index’s (MFI) steady rise indicates that Cardano is firmly in the hands of bulls. For traders, there are currently several prospects for scalping, but in order to maintain investor optimism for a recovery to $1.00, ADA price needs to confirm higher support above $0.64.

An indicator that keeps track of money coming into and going out of Cardano is the MFI. Prices usually increase when the inflow volume far exceeds the outflow volume. This could account for the breakout from $0.65, and ADA might try to close the difference to $1 before the end of December if the trend holds steady.

The ADA price has been recognized for its gradual but consistent increase, which has kept the token from seeing a strong surge despite the favorable market sentiment.

Cardano Daily Active Addresses Climb

The forthcoming trade’s outline, however, seems to have altered as traders have been more engaged on the network, which might perhaps support a healthy upsurge. The on-chain statistics shows that the daily active address has increased significantly and reached quarterly highs.

Based on data from IntoTheBlock, around 80% of Cardano wallet addresses are sitting on unrealized profits at the current $0.56 price level.

If the wallet addresses stated above realize their gains, the asset’s price could correct since more people would be inclined to sell.

Meanwhile, ADA and a few other popular cryptocurrencies have exploded in social dominance, albeit Bitcoin’s influence is also growing.

According to the Santiment data above, market participants are now more positive about altcoins, particularly Cardano. In tandem with a sharp increase in their costs, social media conversations reached a two-month high, suggesting the onset of FOMO.

Therefore, the next few days might be seen as extremely important, since the fear of FOMO also carries a high risk of rejection once it reaches the critical points.

(This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).

Featured image from Shutterstock

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Bitcoin Price Spike May Push Rally To This Amount, Top Analyst Predicts

The recent surge in the price of Bitcoin has revived hope in crypto assets. To this point, pseudonymous crypto analyst Cheds stated that a massive rally might not be far-fetched for BTC soon.

The crypto market struggled with rising inflation rates and other negative factors in 2022. However, in 2023, BTC has picked up positive price momentum, with some investors believing the worst days are over. Ched’s prediction is bullish on the performance of BTC in the future.

Cheds on Twitter gave his forecast on the BTC price based on his technical analysis. He stated that Bitcoin might see a bullish reversal. In his words, above $18,200 opens up the possibility of an inverse head and shoulders complex, multiple shoulders and head with neck base at $25,500.

His optimistic forecast has Bitcoin soaring up to the $37,000 level, which will be a 76% increase from its current value. He suggested that fear of missing out (FOMO) will drive more traders to chase BTC rallies.

Bitcoin also closed above its 200-day moving average. Ched labeled this move a sign of BTC’s strength. He believes the altcoins will also spark to life once Bitcoin and Ethereum slow down to consolidate their positions.

Tim Draper, a BTC bull, was more optimistic about the price movement of Bitcoin. His analysis predicted that Bitcoin would be worth $250,000 by the end of 2023.

While the figures seem outrageous, he stated that Bitcoin would enjoy increased adoption in retail spending. Draper emphasized that only one in seven BTC wallets belongs to a woman. He expects more women to adopt BTC wallets.

Standard Chartered bank held a more pessimistic view. In their forecast, Bitcoin might sink to around $5,000. They also stated that as more exchanges battle financial issues and bankruptcy, the prices will decline. According to their forecast, these financial issues will erode investors’ confidence in digital assets.

What Is Behind The Crypto Resurgence?

The crypto market has improved its outlook, with BTC leading the market. Although experts vary in their forecasts and predictions, several factors have led to this positive turn of events in 2023.

Generally, the financial markets correlate with the American economy. For example, in 2022, inflation rates increased as well as a rise in unemployment rates. The forex and stock markets felt the impact of these rate adjustments, with cryptocurrencies following suit. But the recent inflation data for December showed a decline which may have spiked crypto prices.

Also, cryptocurrencies now enjoy wider adoption and acceptance despite regulations in certain regions. They serve as a faster means for processing payments, and their utility has soared recently. Technological advancements like Web3 have also played a part as most crypto projects look to join this trend. These factors have also boosted the prices of crypto assets.

Bitcoin (BTC) Short Or Long?

Bitcoin Price Spike May Push Rally To This Amount, Top Analyst Predicts

BTC is above the $21k level and has continued its positive price trend in 2023. However, traders might be skeptical about BTC wondering if it is a bull run or a bull trap.

The asset is currently trading above its 50-day and 200-day simple moving averages. This technical indicator shows that both the short-term and long-term look encouraging for Bitcoin.

Featured image from Pixabay and chart from Tradingview.com

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Fear And Greed: Sentiment Turns Neutral As Bitcoin Stagnates, What To Do?

It’s the calm before the storm. What to do when the Fear and Greed index turns grey? Warren Buffett already told us to be greedy when others are fearful. We already know that we should be fearful when others are greedy. What should we do when the market it’s at a rare state of balance and expectations are high? We should probably take a page for those Bitcoin maximalists and… wait for it… HODL!

One of the main criticisms that the Fear and Greed Index gets is that it encourages traders and investors to try to time the market instead of holding strong. Bad things happen to those who try to time the market. Yet, we try to do it. The temptation is too strong. Bad things happen to those who trade emotionally. Yet, some fall for that trap over and over again. In fact, it could be argued that the Bitcoin and cryptocurrencies markets are even more emotional than the traditional ones. And that’s saying a lot. 

In any case, before making any rash decisions, we should remember what we’re talking about here.

The Fear & Greed Index goes into neutral territory | Source: Arcane Research
What Exactly Is The Fear And Greed Index?

We at NewsBTC deal with this constantly. Even though the Fear and Greed Index is a criticized and questionable indicator, there’s an undeniable connection to the market that’s obvious even to the casual observer. When we found a bizarre correlation between the Fear & Greed Index and UTXO data, we prefaced it with:

“As a speculative asset, nothing else quite behaves like Bitcoin. Shifts in sentiment take price action to the extreme. As a result, tools have been developed to monitor the fear or greed in the market.”

The website Alternative.me calculates the main Fear And Greed Index for cryptocurrency markets, they explain its reason to be as:

The crypto market behaviour is very emotional. People tend to get greedy when the market is rising which results in FOMO (Fear of missing out). Also, people often sell their coins in irrational reaction of seeing red numbers. With our Fear and Greed Index, we try to save you from your own emotional overreactions. There are two simple assumptions:

  • Extreme fear can be a sign that investors are too worried. That could be a buying opportunity.

  • When Investors are getting too greedy, that means the market is due for a correction.

We, very simply, explained why when we described how the Fear And Greed Index can be used as a trigger indicator:

“Financial market sentiment can almost always be used as a contrarian indicator. But in a speculation driven industry where hype and buzz matter more than fundamentals, this is even more true.”

BTC price chart on Bitstamp | Source: BTC/USD on TradingView.com
What Does It Mean When The Sentiment Turns Neutral

After what seemed like years of coldness and extreme fear, the market sentiment started improving as early as a week ago. And, even though it doesn’t feel that way, this advance into neutral territory is a huge improvement. As Arcane Research said in their “The Weekly Update” report:

“The Fear & Greed Index has climbed rapidly since late July and touched neutral levels for the first time since May. Despite the slight decline in the last couple of days, the market is certainly getting more bullish. This bullishness is also evident in the futures market.”

So, what should you do now that the sentiment turned neutral? Not much. Keep your finger on the trigger, though. Things are about to get interesting.

Featured Image by Kristopher Roller on Unsplash – Charts by TradingView