Bitcoin has been clearly bullish for the past 2 months and bulls have managed to push the digital asset above $10,000 yesterday. There is no denying that Bitcoin is strong right now and could hit yearly highs again.
If there is one factor against the bulls, the trading volume would be the most important. In a rising market like the one we have, traders would expect to see increasing trading volume but that hasn’t been the case for the past month. This, in a way, shows that the interest in Bitcoin is fading away, however, it doesn’t necessarily mean Bitcoin will drop.
Crucial Statistic Shows Bitcoin Not Likely To Crash
Many traders and analysts are concerned about Bitcoin crashing on the day of the halving as trading volume has been decreasing considerably over the past few weeks. However, recent statistics from ‘Santiment’ show that exchanges are holding fewer tokens than before.
This means that people are withdrawing their Bitcoin and altcoins which indicates they are ready to hold. Every time Bitcoin has been rejected from an important level, the bearish continuation has been really low. Why? Clearly, because people are not selling anymore, at least the majority of people are not and they seem to be ready to hold.
If the selling pressure is really low, bears do not have enough strength to benefit from bearish indicators. The daily RSI has been in the ‘overbought’ zone for a long time now and bears have been unable to see any kind of follow-through. The biggest bearish day has been around a 2% loss for Bitcoin.
FOMO Will Push Bitcoin Up
Clearly, most people are long on Bitcoin so who is pushing the price up? It seems that FOMO (Fear Of Missing Out) is having quite an impact lately bringing new investors to the crypto space. The idea behind FOMO investors is that they will buy Bitcoin at any price to not miss out on possible gains, this pushes the price of Bitcoin even further even with low trading volume because bears are too weak.
This doesn’t mean Bitcoin will go up indefinitely now, there are several risks with the most important one being a possible long squeeze. When everyone is already long, a violent bear move could have enough impact to force many traders to close their positions or even get liquidated which creates a snowball effect.