The Bitcoin market cap surged to the largest ever on Monday. While the price is still 42% below the $1,200 all-time-high, Bitcoin is now worth more than ever.
This headline will attract new blood, but also encourage some bag holders to exit stage left. Regaining lost ground is always harder than making fresh tracks. While the FOMO is palpable, the climb towards $1,000 will be rough and wild.
Bitcoin is not the only star, Ether in USD terms also broke out to the upside. If Litecoin ever sees the light above $40, we know the world will have truly gone bizarro.
Unlike 2013, traders have robust derivatives markets where they can express their bullish and bearish views. Premiums on futures contracts and swaps should be watched closely to gauge the bullishness of markets. Given the heightened volatility, interest rates exceeding 3% per day may become the norm.
Rising rates and premiums are goalposts for possible points of inflection and correction. Keep a close eye on the XBTUSD 8 hour funding rate. Outright rates over 1% per 8 hours indicate extreme FOMO. After 2 years of down then sideways, long live 2016!