Bitcoin FOMO Surges as Traders Pile Back In: But Crowded Bets Can Turn Fast

Bitcoin's brief tryst above $87,000 has flipped market sentiment sharply. But Santiment believes "risk is less attractive now than when the crowd was fearful last week."

Bitcoin pushed past $87,000 on Monday before stabilizing a little below it. But the rally has triggered a strong surge in market optimism.

In fact, Santiment found that Bitcoin-related FOMO has reached a level not seen since late 2024.

$648M in Shorts Gone

Social media discussions are now heavily tilted toward expectations of more gains. The shift comes after a strong short squeeze pushed prices higher. Around $648 million in bearish crypto positions were liquidated within 24 hours. This added fresh buying pressure to the market.

To top that, crypto trading volume also jumped 39% during the move. However, traders are also taking on more leverage. Open interest across the crypto market rose about 7.6% to $156 billion, even after a large number of short positions were wiped out. This suggests some traders are quickly opening new positions instead of reducing risk.

According to Santiment, however, this extreme optimism can become a warning sign when market expectations become too one-sided. The current sentiment does not guarantee a price reversal. But the big jump from fear to FOMO indicates that traders are becoming increasingly confident after BTC’s latest move higher.