Bitcoin ETF FOMO Has Cooled Down, Here’s What Options Data Say
Bitcoin price rose 2.2% in the last 24 hours, once again rising above $43,000 and its market value approaching $850 billion. Despite the selling pressure on BTC, Bitcoin ETFs continued to garner strong interest and inflows. However, the FOMO surrounding the arrival of the Bitcoin ETF appears to be cooling down as the BTC price remains relatively subdued.
Bitcoin ETF Sees Big Shifts in Crowd Sentiment
In a recent analysis by on-chain data provider Santiment, historical patterns of mass debate surrounding Bitcoin have undergone a significant transformation, signaling that market sentiment is changing.
Traditionally, a high proportion of crowded discussions focusing on Bitcoin indicates a sign of fear. However, Santiment notes that the narrative has changed since mid-2023. The enthusiasm and optimism surrounding Exchange Traded Funds (ETFs) for Bitcoin has turned the narrative on its head, turning discussions of high Bitcoin into a display of greed. This shift is driven by unrealistic expectations of market performance following ETF approvals.
Following the SEC’s approval of Bitcoin ETFs three weeks ago, Santiment observed a normalization in this indicator. However, the analysis points to a potential risk: if high discussions about altcoins in the first week of February surpass discussions about Bitcoin, this could push the Bitcoin discussion rate into bearish “unhealthy” territory.
Unlike previous Bitcoin social dominance increases that heralded predictable market tops, a negative increase in this context could indicate that Bitcoin is being overlooked once again.
Santiment notes that despite recent declines, Bitcoin ETFs continue to attract significant trading volume. $ARKB is the leader in terms of volume, followed closely by $FBTC. In particular, there was a decrease in the volume of the long-standing Grayscale Bitcoin Trust GBTC, while others saw an increase in their volume.
Bitcoin Options Data
According to Greeks.Live data, approximately 22,000 BTC options will expire today, February 2, and will be accompanied by a Put Call Ratio of 0.66. The maxpain point is set at $42,000 and has a significant notional value of $960 million, adding importance to the upcoming options expiration.
The cryptocurrency market showed relative stability throughout the week; Both RV (Realized Volatility) and IV (Implied Volatility) experienced downward trends for the major terms. One notable development is the introduction of increased capital into the crypto market through Bitcoin spot ETFs; This signals a shift as grayscale sales slow.
In terms of block trading, more subdued activity is seen, characterized by some whales reducing their positions. The main reason for this decrease is profit-taking strategies associated with bets on ETF movements. Looking ahead, market enthusiasts await the next major development and speculation regarding the Bitcoin halving is gaining traction.
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Bhushan is a FinTech enthusiast and has a good ability to understand financial markets. His interest in economics and finance draws his attention to the emerging Blockchain Technology and Cryptocurrency markets. He is in a constant learning process and motivates himself by sharing the knowledge he has acquired. In her spare time, she reads thriller novels and sometimes explores her culinary skills.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. Neither the author nor the publication accepts any liability for your personal financial loss.
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