The price of Bitcoin reaching US$42 thousand may indeed trigger interest among retail investors, potentially leading to FOMO (Fear of Missing Out). Retail FOMO often occurs when there’s a rapid or substantial price movement in an asset, prompting individuals to fear missing out on potential profits.
It’s important to consider various factors influencing Bitcoin’s price, including market sentiment, macroeconomic trends, regulatory developments, and institutional involvement. Rapid price changes can attract attention from both retail and institutional investors, contributing to increased trading activity.
If you’re interested in understanding the specific drivers behind Bitcoin’s recent price movement, it’s advisable to check reputable financial news sources for the latest insights and analysis. Keep in mind that cryptocurrency markets can be volatile, and investing decisions should be based on careful consideration and risk management.
The price of BTC touched US$42,000 (5/12/23) early this morning. Crypto market capitalization reached US$1.5 trillion, the highest figure since May 2022 when Terra Luna collapsed.
Crypto Price Movements
Bitcoin (BTC) reached its highest point in 19 months above US$42,000 on Monday (4/12/23). Bitcoin prices moved rapidly over the weekend after clearing resistance at US$38,000, the capping price level in November 2023.
When Bitcoin prices rose, altcoins with large market capitalization (big cap) seemed to lag behind, with ETH, BNB, and ADA experiencing increases of 2% – 3%. This can also be seen from the increase in Bitcoin dominance from 53.3% to 54.4%.
Image: Bitcoin’s rise in dominance
Bitcoin’s rise pushed the crypto market capitalization value to more than US$1.5 trillion for the first time since May 2022, when Terra Luna crashed.
Possible Reasons for Bitcoin Price Increase
Bitcoin’s rise is likely due to anticipation of a spot Bitcoin ETF in the US with most market observers expecting approval by the SEC as early as January 2024.
Crypto investment services provider Matrixport noted in a report Monday (4/12/23) that the premium level of Bitcoin futures to spot prices reached high levels, indicating that retail is rushing into BTC for fear of missing out on the price rally.
“Traders do not have enough upward leverage, this is the conclusion of the premium traded on Bitcoin futures,” the report said.
In general, Bitcoin futures trade at a premium of around 5-10% compared to the spot price most of the year, which has now widened to 10-15% and sometimes reached 20-30%.
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