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Bitcoin has been showing signs of recovery after a sharp decline that pushed its price below $80,000 last week. The cryptocurrency briefly surged to $92,756 in the early hours of today before retracing to $90,279, marking a 0.7% increase in the past 24 hours.

While price action remains volatile, market sentiment indicators are signaling a crucial phase for Bitcoins trajectory, according to CryptoQuant analyst Woominkyu.

In a recent analysis titled FOMO is Not Here Yet, Woominkyu highlights Bitcoins Fear & Greed Index, which tracks overall investor sentiment. The index, based on a 30-day moving average (SMA 30), maps Bitcoins market cycles to different psychological stages observed in past rallies.

This indicator has historically helped identify when Bitcoin is in the early stages of a bull runor when excessive optimism may lead to corrections.

According to Woominkyu, Bitcoin has now entered the Optimism Stage, a phase historically associated with the early stages of a strong rally. In past cycles, when Bitcoin reached this level, the market often gained upward momentum, leading to further price increases.

However, the analyst warns that if the index continues rising toward the Euphoria Stage, it could indicate excessive market optimism, which has often preceded steep corrections.

The key observation from Woominkyus analysis is that, despite Bitcoins recovery, FOMO (fear of missing out) has not yet fully set in among investors.

This suggests that while sentiment is improving, Bitcoin is not yet in a speculative bubble. The coming weeks will be critical in determining whether the market follows past patternsmoving higher from the Optimism Stageor if external factors push Bitcoin into a correction.

While sentiment indicators provide insights into market psychology, whale activity is another key factor influencing Bitcoins price movement.

A separate analysis by maartunn, another CryptoQuant contributor, has revealed that whale deposits to Binance have reached a three-month high, with over $7.3 billion worth of Bitcoin sent to the exchange in the past 30 days.

These movements suggest that large-scale investors are actively positioning themselves, which could lead to increased volatility in the market. Historically, significant whale activity has coincided with major price swings, making it an important metric to monitor.

Whale to Binance Flow Hits 3-Month High at $7.3B Over Last 30 Days

This often happens alongside heavy changes in price and shows that large holders choose Binance as their exchange. Watching whale deposits is important, as their moves can drive the market. By @JA_Maartun pic.twitter.com/psD3zuDXf3

CryptoQuant.com (@cryptoquant_com) March 6, 2025

Featured image created with DALL-E, Chart from TradingView