Is the Bitcoin Rally Cooling Down? Altcoin Seasons Starts Brewing (Analysis)
Bitcoin prices tapped a new all-time high for the second time this week but were sharply rejected as analysts suggest exhaustion among traders.
On March 8, on-chain analytics provider Santiment reported that despite the incredible milestone for Bitcoin, “there is a combined sense of exhaustion and altcoin distraction coming from the trading community right now.”
BTC prices briefly topped $70,000 on Coinbase on Friday marking a new all-time high for the digital asset.
However, it sharply retreated from this level for the second time in a week, falling to around $68,000 a few hours later.
Bitcoin Fervor Fading?
So far, it has been largely institutions driving momentum for crypto markets with consecutive days of high trading volumes and inflows for the newly launched spot Bitcoin ETFs.
Santiment also reported that social activity, or the percentage of discussions related to BTC versus other assets, is at a fairly healthy 27.5% right now. However, it is not near the euphoric levels shown when $60,000 was eclipsed less than two weeks ago.
“This is a GOOD thing. FOMO and greed are typically top signals.”
🥳 #Bitcoin has established yet another new #AllTimeHigh today, reaching a market value as high as $70,199 on #Coinbase . Despite the incredible milestone for #cryptocurrency , there is a combined sense of exhaustion and #altcoin distraction coming from the trading community right… pic.twitter.com/S4YqYkiOJ6
— Santiment (@santimentfeed) March 8, 2024
It added that previously dormant coins are continuing to move back into circulation at a rapid pace. This is one of the common factors in nearly every bull market, it stated before adding:
“Until crowd euphoria and coin stagnancy take hold on the Bitcoin network once again, market caps have a path to continue climbing.”
Crypto investor Scott Melker was bullish, telling his 946,000 X followers on March 8 that he believes that we are just at the start of a major bull run for both Bitcoin and the broader crypto market in general.
“I think that we will likely see a huge bubble and that coins with no fundamental value will also skyrocket before it inevitably pops.”
At the time of writing, crypto market capitalization was $2.72 trillion, its highest level since December 2021 and just 12% down from its all-time high.
JPMorgan on Bitcoin ETFs
In related news, JPMorgan analysts estimated the potential magnitude of the bitcoin ETF market size to reach around $62 billion. Net inflow into spot bitcoin ETFs is currently around $9.2 billion, however, some may have been rotated out of similar products such as Grayscale’s GBTC which has seen daily outflows since its conversion.
“This is a realistic target of the potential size of spot bitcoin ETFs over time perhaps within a time period of two to three years,” wrote bank analysts led by Nikolaos Panigirtzoglou.
The new #Bitcoin ETFs purchased nearly 400,000 Bitcoin (worth ~$27 Billion!!!) in just 39 trading days 💥 $GBTC converted to an ETF experienced large redemptions👇 $IBIT $FBTC $ARKB $BITB $BRRR $BTCO $HODL $EZBC pic.twitter.com/MHDXgEvzPg
— HODL15Capital 🇺🇸 (@HODL15Capital) March 8, 2024
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
All Eyes on Walsh: Will the "Central Bank Super Week" See a G7 Rate Hike Wave Next Week?
Amid rising inflation, geopolitical conflicts, and oil prices surpassing $100, G7 central banks are entering a crucial rate-setting week. Driven by higher-than-expected core inflation, the Federal Reserve is expected to implement its first rate hike in three years; the Bank of Japan is likely to raise rates to 1.25%, marking a 30-year high; meanwhile, the Bank of England, the European Central Bank, and the Bank of Canada are also reinforcing their hawkish stances. Global monetary policy is undergoing a major turnaround towards collective tightening.
Uniswap processes $70.6 billion in 30-day DEX trades, outpacing rivals
Morgan Stanley’s $50.6M BTC buying shields market – But rally to $82K has THIS hurdle
Will the Fed "continue raising interest rates"? Will the "tightening cycle" of the late 1980s be repeated?
The Citi report points out that the current macro environment is highly similar to the tightening cycle of 1988-1989, when the economy remained resilient and inflation pressures gradually accumulated, followed by a slowdown in economic activity before policies shifted to easing. During that tightening cycle, the Federal Reserve raised interest rates 16 times in a row.
Crypto prices
More
