The Bitcoin (BTC) price surge above $20,000 in the second week of January caused FOMO (fear of missing out) in the market, especially among small BTC holders.
There was a significant increase in BTC addresses with 0.1 BTC or less after January 13. According to data shared by cryptanalysis firm Santiment, 620,000 new BTC addresses have appeared since the January 13 BTC price hike, for a total of 39.8 million.
The increase in Bitcoin addresses with small amounts indicates investor optimism that it is picking up again in 2023. The growth of such small addresses was very limited and slowed down noticeably. post-FTX crash in November 2022, but 2023 has seen the rate of new address creation increase.
The recent rise in small Bitcoin addresses is the highest since November 2022, when BTC fell to its cycle low of around $16,000. The price drop led small traders to buy BTC at a lower price. The current rise is attributed to growing bullish sentiment in the market where, in addition to Bitcoin, several altcoins have also posted multi-month highs, while the overall crypto market is up more than 30%.
Related: Bitcoin, Ethereum and Select Altcoins Set to Resume Rally Despite February Crash
Bitcoin continued its bullish momentum in the first week of February, hitting a five-month high above $24,000. However, the $24,000 resistance proved too much to hold, with the price hovering around $23,000 at the time of writing. Market experts believe that February may not be as bullish as January.
Amid confusion over how incoming US macroeconomic data may affect market sentiment, market analysts have warned that the rally in cryptocurrencies and stocks this year may turn bearish this month. They attributed the potential downside looming to the extent of the Federal Reserve’s rate hikes.
