Fear of missing out (FOMO) was prevalent in the market during the second week of January as a result of the rise in price of Bitcoin (BTC) over $20,000, particularly among holders of a modest amount of BTC.
After January 13, there was a large increase in the number of Bitcoin addresses that held 0.1 Bitcoin or less.
Since the price of bitcoin spiked on January 13, a total of 39.8 million new Bitcoin addresses have been created, according to data that was recently provided by the cryptocurrency analytics company Santiment.
In 2023, a regrowing investor confidence may be inferred from the growth in the number of Bitcoin addresses holding just tiny sums. The construction of new addresses has been increasing at a faster pace as of 2023, despite the fact that the growth of such tiny addresses was very constrained and halted dramatically when the FTX collapsed in November 2022.
The latest surge of Bitcoin addresses for amounts less than one bitcoin is the greatest it has been since November 2022, when BTC reached its cycle low of about $16,000. As a result of the price drop, smaller dealers were able to purchase Bitcoin at a more favourable price. The present increase may be due to a rising optimistic feeling in the market, where, in addition to Bitcoin, other altcoins have also hit multimonth highs, while the total crypto market rose over 30%. This is the market where the majority of the altcoins have outperformed Bitcoin.
In the first week of February, the positive momentum that Bitcoin had been riding into the month continued, as the cryptocurrency reached a new high of over $24,000. However, the $24,000 barrier proved to be too much for the market to maintain, and at the time this article was written, the price was trading about $23,000. According to the opinions of market analysts, February may not be as positive as January was.
In light of the uncertainty surrounding the potential impact of forthcoming macroeconomic data from the United States on market mood, market professionals have issued a warning that the recent upward trend in crypto and stocks may reverse course this month. They ascribed the size of the likely future downward trend to the Federal Reserve’s rises in interest rates, which have been taking place recently.