February turned the cryptocurrency world on its head again with a spectacular rally in Bitcoin (BTC). The king of cryptocurrencies skyrocketed by 45%, successively breaking through major resistance and even briefly reaching the $64,000 mark. According to a recent report from crypto analysis agency Santiment, the crypto market could take a different turn in March.
Indicators point to a possible BTC correction
Bitcoin’s rally has triggered a wave of FOMO (Fear Of Missing Out) among investors. However, the euphoria could be tempered by signs of an impending correction. Wallets active in the last 30 days posted returns of over 20%, and wallets active in the last year even posted gains of over 64%, the highest since April 2021. These overheated returns indicate that the market is on the move, according to Santiment a dangerous zone.
📊 February was a month of celebration, assuming you didn’t bet against the hustle and bustle #Crypto Markets. The first full month since the new spot existed #Bitcoin ETFs have been a resounding success and volume continues to increase as March begins. Read our monthly… pic.twitter.com/FxmGIc0DWb
– Santiment (@santimentfeed) March 1, 2024
Furthermore, it appears that BTC whales, the main players in the market, are redistributing their assets. This could indicate a preparation for a sale or a strategy to distribute assets across different wallets for security reasons. Although the share of BTC on exchanges is still low, similar to 2017, this activity increases the risk of a short-term correction.
Cautious optimism for March
The question now is what March will bring. Will the market see a correction or will the upward trend continue? Santiment believes the answer will largely depend on the community’s reaction to any price drops. If current buyers sell quickly on a decline, it could accelerate a correction. On the other hand, if whales take advantage of the decline to accumulate more BTC, this could stabilize the price or even trigger a new rally.
Historical data shows that a market correction is often preceded by a combination of high average returns and weak whale accumulation. However, the crypto market is known for its unpredictability and the situation can change quickly depending on macroeconomic factors and investor sentiment.