Bitcoin has fallen back below $30,000 to kick off the new trading week, sending shockwaves through the cryptocurrency market. As analysts scramble to explain the sudden drop, many are pointing to the role of FOMO (fear of missing out) in driving market tops and subsequent corrections.

The crypto analytic platform Santiment tweeted that stablecoin retail money caused Bitcoin’s price to drop below $30k:

According to a new insight, prices historically move in the opposite direction of the crowd’s expectations, and FOMO often plays a dominant role in driving market sentiment. As retail investors flock to buy into the hype, prices can soar to unsustainable levels, only to come crashing back down as the bubble bursts.

Analysts could accurately gauge the current market sentiment by examining the number of retail investors investing in cryptocurrencies and monitoring on-chain data, the distribution of token holdings and stablecoin holdings, network activity, and funding rates across multiple exchanges for BTC and ETH perpetual futures contracts. These indicators can provide insights into market sentiment and FOMO.

Finally, monitoring the sentiment expressed by popular cryptocurrency influencers on platforms like YouTube could provide valuable insights into market sentiment and potential FOMO among retail investors. A widespread positive consensus among these influencers may indicate growing optimism and FOMO in the market.