As Bitcoin enters the price discovery phase again, many participants in the crypto market are focusing on one question: Has retail FOMO (fear of missing out) been triggered? Will we see a repeat of the scenario where retail investors flocked in during past bull market cycles?
To clarify this, we will analyze the current state of the Bitcoin market through active addresses, historical cycles, and other market data, as well as what it may imply for future trends.
Retail interest resurgence
An obvious signal of increased retail interest is the number of newly created Bitcoin addresses. Historically, we often see a surge in new addresses when new retail investors enter the market, which is often a sign of a bull market starting. However, in recent months, the growth of new addresses has not reached the speed many anticipated. Last year, we saw about 791,000 new Bitcoin addresses created in a single day, indicating a strong interest from retail investors at that time. In contrast, although the number of new addresses has slightly increased now, the overall level remains relatively low.
Google Trends data also supports this resurgence of retail interest. Despite an increase in the search volume for 'Bitcoin' over the past month, it remains significantly lower than the peaks seen in 2017 and 2021. Retail investors seem to show some curiosity about Bitcoin, but it has not yet reached the level of that frantic FOMO (fear of missing out).
Changes in holders
We can see that Bitcoin is shifting from long-term holders to some new short-term holders. This change may indicate that the market has entered a new phase, with old players beginning to cash in profits and selling Bitcoin to new market participants. However, the total amount of Bitcoin being transferred is still not significant, which also suggests that long-term holders are not mass selling their Bitcoin.
Looking back at history, during the 2020-2021 bull market, we saw a significant amount of funds shift from long-term holders to new investors, which also drove the price up. But now, this transfer is not obvious; despite the price increase, long-term holders still choose to hold onto their Bitcoin. This unwillingness to sell lightly indicates their confidence in Bitcoin's future price potential.
Spot-driven rise
Regarding Bitcoin's recent rise, the key is spot-driven, which is very different from past bull markets that relied on leveraged trading. The growth of open contracts in the Bitcoin derivatives market is limited and far below previous peaks. For example, before the FTX collapse in 2022, open contracts were already very large. A spot-driven market does not overly rely on leverage, making it more stable and resilient, as there are fewer investors facing forced liquidation risks.
Whales are accumulating
Interestingly, while the number of retail addresses has not significantly increased, the number of 'large whale' addresses holding over 100 BTC has been continuously rising. Over the past few weeks, these large wallets have added tens of thousands of Bitcoins, with a total value reaching billions of dollars. This shows that even as Bitcoin approaches historical highs, these whale investors remain confident in the current price rise.
In past bull market cycles, we typically saw whales choose to exit or reduce their holdings when the market peaked, but this time we have not seen such a situation. On the contrary, experienced holders are increasing their Bitcoin holdings, which is undoubtedly a strong bullish signal as it reflects confidence in the market's long-term potential.
Conclusion
Although Bitcoin has risen to historical highs, attracting market attention, we have not yet seen retail investors exhibiting 'FOMO' (fear of missing out). This suggests that we may still be in the early stages of this bull market. Long-term holders remain confident, whales continue to accumulate Bitcoin, and leverage remains moderate, all of which indicate a healthy market and a potential continuation of the upward trend.
As the bull market cycle progresses, the market structure also suggests that there may be more retail-driven price surges in the future, at which point Bitcoin could potentially break new heights.
