Bitcoin prices soared to a three-week high on Tuesday in a “long-awaited rebound,” prompting traders to “expect FOMO to return and prices to rise,” according to blockchain analysis firm Santiment.
Bitcoin (BTC) price rose to $94,625 on Coinbase in late trading Tuesday, its highest since November 25, according to TradingView.
Santiment said this has led to an explosion of calls for “something higher” and “something higher” on social media across various platforms.
Positive social sentiment does not necessarily lead to promotion. sauce: Saintly
But it has already begun to retreat from that level, falling to $92,400 at the time of writing, leaving analysts wondering where it will go next.
“The market moves in the opposite direction to what small traders do,” Santiment said, adding that this appears to be happening in the hours after the monthly high.
Bitcoin volatility before Fed decision
Some analysts have warned that Wednesday's Fed meeting, if held, could challenge the recent rally.
The U.S. Federal Reserve is scheduled to announce its interest rate decision on Wednesday, with an 88.6% chance of a 0.25% rate cut, according to CME Group Futures.
“Bitcoin is likely rising on expectations of a rate cut, but at this point it’s hard to say what will happen after tomorrow’s Fed meeting,” Jeff May, chief operating officer of the BTSE exchange, told Cointelegraph.
He warned that hesitation about future rate cuts could be bearish for Bitcoin and the crypto market. The CME futures prediction market has a 21.6% chance of another quarter-point rate cut in January.
“The risk is that the Fed's outlook could include hesitation in cutting rates or further stimulating the economy due to the risk of triggering inflationary pressures. Something similar happened the last time the Fed cut rates, and prices subsequently fell sharply.”
Analyst Sycoderic agreed: “Tomorrow (Wednesday) will be very volatile, so it's difficult to read the price trend leading up to the FOMC.”
Bitcoin investors suggest recent price movements are suspicious
Long-term Bitcoin investor NoLimit told his 53,000 X followers that the move was “pure manipulation.” Bitcoin's sudden rise to $94,000 “doesn't seem natural at all,” he continued.
“People are celebrating, but if you zoom out for even 10 seconds, the movement retains all the traces of a classic artificial pump.”
The analyst said the small number of orders made it cheap to push prices up, and that large purchases in the market were concentrated within minutes, followed by “just a quick stall” with zero continuity.
“This is exactly how big companies create FOMO so they can unload at a better price.”
BTC’s rise above $94,000 was short-lived. sauce: TradingView
