Why Bitcoin ‘FOMO’ remains critical to its $64,000 quest
Bitcoin breached the $55,000-level on 8 October 2021. This, once again, fueled expectations that BTC will soon hit its ATH on the charts.
However, it hasn’t yet. In fact, in the last 24 hours, the crypto has climbed as high as $57,890 before falling back to $56,500. At press time, it was at $57.3k all over again.
Now, these are hardly concerning signs as the asset remains at a higher price range. However, keeping the long-term rally in perspective, the collective industry might be missing the presence of another bullish catalyst.
Retail investors, where you at?
Source: Glassnode
While Bitcoin is currently close to its ATH levels, on-chain data suggests that retail investors are yet to FOMO in the market. While these buyers do not mould the long-term market structure, they are crucial for triggering rallies past key resistances.
Now, according to data, the number of Bitcoin receiving addresses remains well below the yearly average. What’s more, the number of transactions is lower than the average seen in 2020.
These datasets are retrieved from successful on-chain transactions, with the current transfer counts/addresses at the same levels as when Bitcoin was valued at $40,000.
Source: Glassnode
When the net transfer volume from exchanges was analyzed, there seemed to be neutrality between inflows and outflows. This means there is too much aggressive buying going on for Bitcoin on the charts.
It can be argued that over the past few weeks, long-term HODLers have pushed the price above $42,000 and eventually, $50,000. However, in order to break further resistances, FOMO sentiment might be required from new retail investors.
Source: Glassnode
Is Bitcoin facing another short-term correction?
A while back, Bitcoin seemed to be retracing from the strong supply zone it established back in May 2021.
Source: Trading View
As can be identified from the charts, the highlighted red zone might be a strong selling zone for investors who bought it right before the corrections in May 2021. And, they could be looking to break even.
Once their contracts are filled, they might be looking to re-enter the market at a lower range, and the market might be due for another correction after rallying by 30% in the month of October.
By and large, BTC’s credentials remain strong and there isn’t an immediate threat that will invalidate its immediate support. However, another phase of market rush will be essential if the asset has to push above $64,000 over the next few weeks.
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Biraaj T, Khareem Sudlow
