Bitcoin Surpassing $2 Trillion Market Cap Sparks Retail FOMO. What’s Coming Next?

The recent emergence of Bitcoin (BTC) with a market capitalization surpassing $2 trillion has drawn in a significant influx of new participants, while experienced traders are exercising caution, as revealed by an analysis of on-chain data.

Last Thursday, BTC’s price surged past $100,000, pushing its market cap over the $2 trillion threshold for the first time since January 31. Following this peak, it has remained stable above that level, with predictions of new record highs fueled by upcoming U.S. inflation data expected later this Tuesday.

In thriving market conditions, it is typical for new investors to enter, and current data reflects a substantial number doing just that, suggesting a phenomenon known as retail FOMO, or “fear of missing out.” This occurs when investors feel pressured to buy due to observing others profiting or fearing they might miss out on ascending prices, leading to impulsive, emotion-driven decisions instead of informed analysis.

According to Glassnode, “BTC Supply Mapping indicates persistent strength in new demand. The RSI for first-time buyers has remained at 100 all week.”

The supply-mapping tool from Glassnode provides a detailed analysis of various investor segments based on their behaviors.

Newcomers to the market are classified as wallets that are engaging with Bitcoin for the first time. The 30-day relative strength index (RSI) for these first-time buyers being at 100 throughout the week indicates robust purchasing interest among these new investors.

Conversely, performance among other investor segments reveals less optimistic trends, suggesting a potential consolidation or pullback in BTC pricing.

Glassnode reports that the demand from momentum traders is currently weak, with a 30-day RSI clocking at 11. Momentum traders aim to capitalize on burgeoning trends, betting that they will persist.

Glassnode commented, “Momentum buyers show weakness (RSI ~11), and the number of profit takers is increasing. A slowdown in fresh inflows could lead to a lack of follow-through, resulting in consolidation.”