{"id":423269,"date":"2020-05-09T10:00:52","date_gmt":"2020-05-09T10:00:52","guid":{"rendered":"https:\/\/wncen.com\/?p=423269"},"modified":"2024-06-11T13:48:34","modified_gmt":"2024-06-11T13:48:34","slug":"bitcoin-may-have-rallied-170-but-data-shows-a-fomo-surge-is-possible","status":"publish","type":"post","link":"https:\/\/wncen.com\/news\/bitcoin-may-have-rallied-170-but-data-shows-a-fomo-surge-is-possible\/","title":{"rendered":"Bitcoin May Have Rallied 170% But Data Shows a “FOMO” Surge Is Possible"},"content":{"rendered":"

Bitcoin has made immense progress since the lows seen in March.<\/p>\n

As the chart below depicts, from the lows of $3,700, the cryptocurrency has gained in excess of 150%. This rally comes in spite of the global economy, heading into recession \u2014 a recession that the Federal Reserve, the Bank of England, and the International Monetary Fund have called the worst in decades.<\/p>\n

\"Bitcoin
Chart of Bitcoin’s performance since the $3,700 lows seen on March 12th. Chart from TradingView.com<\/figcaption><\/figure>\n

It’s an outperformance that has left many wondering how sustainable Bitcoin’s<\/a> rise is. Because if a brutal recession really is on the horizon, why should BTC outperform?<\/p>\n

According to a top economist tracking the crypto markets, from the data alone (casting aside the macro backdrop), Bitcoin is showing it has “room” for a FOMO run.<\/p>\n

Bitcoin Still Has Lots of Room to Rally<\/strong><\/h2>\n

Alex Kr\u00fcger, an economist and analyst in the Bitcoin space, found<\/a> that BTC’s recent move past $10,000 was decisively different than the move to $10,000 in February earlier this year:<\/p>\n

“Last time Bitcoin was around $10,000, in February, aggregated open interest was 65% higher and Bitmex XBT funding was 10 times higher, ticking at an approximately 100% annualized,” he wrote.<\/p><\/blockquote>\n

He indicated that this is a clear sign that the cryptocurrency market is less leveraged than it was during the last rally. The low funding rates and low open interest suggests that Bitcoin’s recent move was driven by spot investors on platforms like Coinbase and Kraken, as opposed to leveraged traders opening long positions on BitMEX and similar platforms.<\/p>\n

The two core conclusions that can be drawn from this analysis, Kr\u00fcger wrote, are simple: 1) there is “more room for a FOMO run,” and 2) there is “less room for a massive dump.” He added that it’s “impressive” Bitcoin has made it this high without showing signs of being overleveraged.<\/p>\n

Related Reading: The Days of Futures Halting Bitcoin From Passing $1 Trillion Are Likely Over<\/a><\/h6>\n

What Will Catalyze the FOMO?<\/h2>\n

With Bitcoin stalling around $10,000 over the past few days, it is clear the “FOMO” that was seen this week has largely subsided.<\/p>\n

The next bout of buying activity will likely be caused by a confluence of things, the Bitcoin block reward halving included, some analysts have said.<\/p>\n

Fundstrat Global Advisors, a New York-based research firm, identified four such trends<\/a> that could catalyze Bitcoin buying activity in the near future:<\/p>\n