There Are A Lot Of Chances For FOMO To Become A Hindrance In The Rise Of Bitcoin Before The Occurance Of Pandemic




Along with the more significant profit percentage, there are also chances of loss in the rise of cryptocurrencies. Because sometimes, as the bull starts, it can also turn into a bearish market and can turn the profit into a loss.

The major hindrance related to cryptocurrencies is FOMO. Shortly stands for “fear of missing out” and is a feeling of anxiety when you are a person in good condition. 

With a gain of more than 26% since the beginning of the month, Bitcoin has surged ahead of bearish, which had predicted further difficulties for riskier investments following 2022’s strong selloffs.

Since a 31% rise in 2020 prior to the pandemic, the token’s current gain is the greatest for an annual first month. According to statistics from CoinGecko, the surge has pushed the total value of digital assets above $1 trillion for the first time. This figure was reached in November before the FTX exchange crashed.

The biggest cryptocurrency, along with other coins including Ether, Avalanche, and Algorand, increased by as much as 2.5% on Monday and was trading at $20,860 as of 12:18 p.m. in London, down slightly for the day.

The rise in cryptocurrencies is partly a wager on punitive interest rate increases, a scenario that has also increased the value of commodities like gold, bonds, and equities. 

Even then, given that central banks like the Federal Reserve are promising to maintain high policy rates until still-strong inflation is defeated, investors are speculating whether all these assets have risen too quickly or too quickly.

Noelle Acheson, using the acronym “FOMO” for “fear of missing out,” said in her “Crypto Is Macro Now” newsletter that while there is a lot of uncertainty surrounding digital assets. 

The uncertainties include whether a short squeeze that is driving up prices would abate, “FOMO is likely to play a role in how the market evolves from here.”

According to analyst Kaiko, the surge is being driven by “whales,” or significant crypto holdings, as seen by an increase in the average size of deals. Since January 8, Kaiko noted, trade sizes for the Bitcoin-US dollar pair on the Binance platform have climbed to $1,100 from $700.

Meanwhile, according to Kaiko, market depth, which measures the potential impact of a single large deal on the price of Bitcoin, is still below where it was when FTX went out of business.

As a result of FTX’s bankruptcy and the subsequent fraud allegations against co-founder Sam Bankman-Fried, the cryptocurrency industry is still on high alert for more repercussions. 

The debt problems that cryptocurrency brokerage Genesis and its parent company Digital Currency Group are working to settle might cause market turbulence.

Some technical signs, however, indicate that the rise of Bitcoin may be reaching its limits. The token’s momentum indicator, the 14-day relative strength index, has reached 90. That is the highest level in over two years and much beyond the 70 mark, considered “overbought.”

About the author, Awais Rasheed

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