Crypto analytics firm SFOX has it that the Fear of Missing out (FOMO) buying that recently saw the price of Bitcoin hit 2019 highs of above $9,000, has run out of steam. While the price of BTC has been on the ascendancy since the early April prices of $4,100, it has now hit a plateau and it remains to be seen whether the price will rally back up or come crashing down.
BTC Buys largely driven by FOMO
SFOX which depends on price momentum and market sentiment registered BTC as “mildly bullish” rating but has since been downgraded to “uncertain”. FOMO has clouded overall sentiment over the last couple of weeks as people hit the buys quickly anticipating a further rally. Emotion driven investing has resulted in massive BTC price volatility leaving whale sellers who have controlled the market dominating, and leaving FOMO buyers hitting their stop losses.
When the market began to show signs of life this year, investors began stock piling the bottom in anticipation of a boom as the prices began to move north. In early April, it appeared like BTC was set for a much awaited comeback to renew the remarkable Bullish trend of 2017. BTC did indeed show signs of a revival with the price rising from $4200 to just above $9,000; the price has dipped towards $8,200 at the moment and analysts are blaming it on the stock market woes and the looming trade war with China.
Bitcoin as a hedge to failing stock market
SFOX has it that BTC held a negative correlation to the S&P 500 all through May, with investors using Bitcoin as a way to hedge their bets against the crashing stock market. Chinese investors also contributed to the Bitcoin prices soaring, buy buying BTC in large amounts in fear that the Yuan would decline due to the trade war. It is no doubt that investors in both the US and China have been seeking to hedge their holdings in Bitcoin amid the simmering trade tensions between the two countries.
Stock market uncertainty has led to a 5x increase in the demand for BTC. Despite claims that Bitcoin will have little to no value in the future, the crypto-currency is now being touted as a possible replacement for Gold in terms of storage of value. The Winklevoss brothers have actively championed BTC as a viable store of value in the near future, and so has former Coinbase CTO Balaji Srinivasan.
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