TL;DR
- Bitcoin surpassed $94,000, sparking a significant increase in retail traders’ enthusiasm.
- “Santiment” warns that the retail-driven FOMO is a characteristic of market peaks, suggesting a potential correction.
- Despite the excitement, analysts and large investors point to a possible cooling-off period before a new rally.
Bitcoin price has recently reached the impressive figure of $94,000, igniting excitement among retail traders. Predictions that the price could reach $100,000 flooded social media. However, Santiment, a well-known analysis firm, warns of the dangers of FOMO, suggesting that this phenomenon could be a precursor to an imminent correction.
Retail FOMO and Whale Accumulation
The recent surge above $94,000 has attracted retail traders, which is common during Bitcoin’s bullish phases. However, according to Santiment, FOMO typically occurs near market peaks when inexperienced traders buy on impulse, often leading to overvalued assets. Despite this euphoria, large investors have also been quietly accumulating Bitcoin at a fast pace. In the past month alone, wallets holding between 10 and 10,000 BTC have added over 50,000 BTC, indicating significant asset accumulation by the larger investors.
This phenomenon is also reflected in the flow of Bitcoin to exchanges. Data from CryptoQuant shows a decrease in net flows to platforms, suggesting that investors are opting to store their BTC for the long term, rather than making short-term sales. This re-accumulation pattern has historically preceded price appreciation.
Greed Grows, but So Does Caution
The Fear & Greed Index reached its highest point in over two months, peaking at 72 on April 23. Although it slightly dropped to 60 on April 25, it remains in “Greed” territory, raising questions about the sustainability of the current bullish momentum. While some analysts, such as Michaël van de Poppe, believe that buying pressure could push Bitcoin to new all-time highs, warning signs are evident.
Despite these concerns, institutional demand for Bitcoin continues to rise, with record inflows into U.S. Bitcoin ETFs, reaching $2.68 billion in the last week. According to ARK Invest, Bitcoin could reach as high as $2.4 million by 2030 in their most optimistic scenario.
While the surge above $94,000 has generated euphoria, technical signals and accumulation data suggest that, although the future remains promising, the market might experience a correction before the next bullish leg begins. Investors are advised to maintain patience and a long-term perspective in the current climate.
