By the numbers, this may be your last chance to FOMO in and still profit

It's getting real close to peak FOMO territory. Just about everyone is feeling it if they haven't given in yet. I have to start with a basic primer on the reason for the bull market bear market rally.

What we have seen is a number of factors that have pushed prices down to their bare support levels, such that everyone who would have sold, had sold. These factors are the FTX collapse and end-of-year tax shenanigans. FTX saw exchange runs as users removed their funds from exchanges, which saw reserves crash. Reserves of coins like BTC fell 30%, ETH 40% and mostly the rest 50% or more. On top of this, many traders with whales in particular doing asset manipulation management tricks(wash trading, tax loss harvesting etc) to save on taxes that typically amount to lots of selling that drove down prices last year into this year, all these things are a common annual market phenomenon at the end of the year.

What we have seen this is some mixture of smart money buying low, tax-avoidant money returning to markets and traders returning to exchanges. From being 30% down, Bitcoin has recovered 91% of the reserves they lost in the FTX collapse, Ethereum reserves 81% and altcoins around 70% or so roughly. The graph shows a clear relationship between reserves and price.

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BTC Reserves 3M - top 40 exchanges(blue line)

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ETH Reserves 3M - top 40 exchanges(blue line)

All that is to say that exchange reserves are converging on fully recovering to their pre-FTX levels. With the amount of trading, I do expect reserves to surpass their pre-FTX levels, but the point is that there is no guarantee that they hold as it will only be dependent on whales moving the markets, who will inevitably at some point use retail for exit liquidity. Since ETH and altcoin reserves have more runway to recover still, it is probably be a good bet to invest in those right now as they will eventually catch up to Bitcoin's reverse and price gains.

Tldr: Exchange reserves are getting close to fully recovering from the FTX collapse losses. When they are are close to or have fully recovered, there is no guarantee the pump continues.