Here’s What to Expect in March After Bitcoin’s Rally to $64K: Santiment

[ad_1]

Analysts at crypto intelligence platform Santiment said Bitcoin’s remarkable performance in the 29 days of last month gave leap year a new definition, but the market may be in for a different ride in March.

According to the Santiment’s monthly report, several on-chain indicators suggest the market is in a bit of a danger zone and faces an increased risk of a correction in the short term.

A Bit of a Danger Zone

Bitcoin recorded a 45% surge in February, blasting past $45,000, $50,000, $55,000, and $60,000 within three weeks. The asset was eventually rejected at $64,000 and was hovering around $62,000 at the time of writing, per data from CoinMarketCap.

The euphoria of the rally has triggered the fear of missing out (FOMO) among market participants, although at a fair level.

Besides the FOMO, long and short-term active wallets may soon begin to sell their BTC as their average trading returns have increased significantly. Wallets active in the past 30 days have recorded more than 20% profits, although the figure had fallen to 14% at press time.

Wallets active in the past 365 days have seen returns of over 64% (59% at writing time), the highest since April 2021. These returns were not even recorded in November 2021, when BTC reached its all-time high.

Likelihood of a Short-term Correction

Furthermore, Bitcoin whales have been showing signs of splitting their holdings. Santiment says this happens when whales move a portion of their assets to or from exchanges to sell or hold. Also, they may be interested in transferring their coins to multiple wallets for security purposes. Fortunately, the percentage of BTC on exchanges is still at 2017 levels; hence, the assets are not being moved to the platforms yet.

Historical data shows that super-inflated average trader returns combined with weak whale accumulation would likely lead to a short-term correction.

“From there, it would really be dependent on the crowd. Do they start to panic? Do recent traders who bought at $63K immediately sell if prices drop to $55K? Do whales scoop up those coins if the small traders do indeed panic sell? Does the mean dollar invested age line still drop when the prices stop surging?” Santiment stated.

While the outcome of recent on-chain movements remains to be seen, it remains undisputed that the crypto market is in for a wild March.

SPECIAL OFFER (Sponsored)

Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).

[ad_2]

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *