Can $163 Billion FOMO Accumulation Cause Bitcoin Price to Recover?

Bitcoin has recently experienced significant sideways movement, as the "king" of cryptocurrencies struggles to overcome important resistance levels.

Nevertheless, Bitcoin continues to be actively traded, with short-term and new market investors. However, this new capital flow can bring both opportunities and risks.

Bitcoin Investors Have Been Busy

Recent data from URPD (UTXO Realized Price Distribution) shows that over 1.38 million BTC, valued at more than $163 billion, has been accumulated between $115,500 and $120,000. This accumulation occurred over the past two weeks, a relatively short period, indicating that many of these buy transactions come from short-term or new investors.

These buyers are likely to sell to take profits or avoid losses if the price reverses. This could create volatile conditions, especially if Bitcoin encounters resistance or experiences a downward correction.

Bitcoin's macro momentum shows mixed signals, with Bitcoin Flow Pulse currently declining. Analyst Kyledoops notes that, unlike previous market cycles in 2017 and 2021 when Bitcoin saw an increase in flow before a major sell-off, Bitcoin Flow Pulse is actually decreasing after Bitcoin reached $120,000.

This suggests that "whales" are not moving their assets to exchanges, signaling potentially less selling motivation from long-term investors (also known as "diamond hands"). As Bitcoin Flow Pulse continues to decline, this may indicate that institutional and large investors are taking a more cautious approach.

BTC Price Still Seeking Direction

Bitcoin price is consolidating between $117,261 and $120,000. The $120,000 level, in particular, is an important psychological barrier. Breaking through it could trigger profit-taking from investors still skeptical about the current price increase.

With mixed market sentiment and the increase of short-term investors, Bitcoin is likely to continue moving sideways. The price may trend towards a potential drop below $117,261, but Bitcoin is expected to maintain support above $115,000, creating a buffer against deeper declines. This consolidation phase may last for several days as the market digests the new capital flow.

However, if FOMO-driven buyers remain confident and continue to hold their positions, Bitcoin could break through the $120,000 barrier and ultimately aim for $122,000. If this occurs, the current bearish sentiment will be neutralized, and Bitcoin will have potential for further increases.