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Last week, Bitcoin’s price experienced a significant drop, but on Friday, it made a strong comeback, reversing this trend. On Wednesday, May 1, the leading cryptocurrency fell below $60,000 for the first time in nearly two months. However, on Friday, May 3, Bitcoin’s price climbed back above the $60,000 level. At the time of writing, it had surpassed the $64,000 mark. Now, the question is: Can this recent revival turn into a sustained rally for Bitcoin?
How Long Will the BTC Price Rally Last?
A recent article by Santiment analyzed the latest fluctuations in Bitcoin’s price and noted that the movement above $62,000 indicates a shift in investors‘ positions and sentiments. According to their analysis, traders on the Binance platform have shifted from short-focused to long-focused positions following the recent price increase.
This change in sentiment could be a sign of renewed optimism in the leading cryptocurrency. However, Santiment issued a warning for those monitoring Bitcoin’s price and considering entering the market. As mentioned in their Blockchain analysis:
“For the rally to continue, we want to see FOMO at higher levels than it is currently.”
FOMO, or the fear of missing out, refers to a situation where investors hurriedly buy assets for fear of missing potential gains. This can drive up prices in the short term, but excessive FOMO often leads to unsustainable rises followed by declines. Additionally, crypto prices often move contrary to the community’s expectations. Therefore, if most traders believe Bitcoin’s price will rise, a price drop is likely.
Background of the Rise in Bitcoin’s Price
At the time this article was written, the cryptocurrency Bitcoin’s price had passed $64,400. The critical level now is $65,000. Accordingly, it has shown a 7% increase in the last 24 hours. What exactly triggered the latest Bitcoin rally remains unclear, but on-chain data suggests recent whale activity may have initiated the rise in momentum.
CryptoQuant CEO and founder Ki Young Ju recently posted that Bitcoin whales had purchased 47,000 BTC in a single day. Ju also mentioned that this class of investors might include addresses associated with ETFs, but the recent increase in “whale addresses” is not related to ETFs.
