Santiment: Crypto Markets May Experience “Correction” Ahead of Upcoming Halving

• Bitcoin’s meteoric rise in February saw a staggering 45% surge, catapulting past key milestones.
• The excitement surrounding the rally has triggered a palpable fear of missing out (FOMO) among market participants.
• While the outcome of these on-chain movements remains uncertain, it is evident that March holds the promise of a volatile ride for the crypto market.

Bitcoin’s performance in February has redefined expectations, but analysts warn that March might bring a different narrative. According to insights from crypto intelligence platform Santiment, several on-chain indicators are signaling a potential danger zone and an increased risk of a correction in the short term.

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Bitcoin’s February Performance Triggers FOMO

Bitcoin’s meteoric rise in February saw a staggering 45% surge, catapulting past key milestones of $45,000, $50,000, $55,000, and $60,000 within a mere three weeks. However, the rally hit a ceiling around $64,000 before stabilizing around $62,000 at the time of reporting, as per data from CoinMarketCap.

The excitement surrounding the rally has triggered a palpable fear of missing out (FOMO) among market participants, albeit at a somewhat measured level. Yet, beneath the surface, signs of caution emerge.

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Active wallets, both long and short-term, are showing signs of potential sell-off as their average trading returns soar. Wallets active in the past 30 days have seen profits exceeding 20%, though this figure has dipped to 14% at present. Meanwhile, wallets active over the past year have witnessed returns surpassing 64%, the highest since April 2021, suggesting a significant shift in sentiment compared to November 2021, when BTC hit its all-time high.

Bitcoin Whales Also Making Huge Moves

Moreover, Bitcoin whales, the large holders of the cryptocurrency, are displaying behaviors indicative of redistribution. Santiment highlights instances where whales split their holdings, possibly moving assets between wallets or to and from exchanges, a trend observed during times of decision-making regarding holding or selling. Notably, despite these movements, the percentage of BTC on exchanges remains at 2017 levels, suggesting a lack of immediate sell-off pressure.

Historical data suggests that such inflated average trader returns combined with weak whale accumulation often precede short-term corrections. Santiment’s analysis poses critical questions about the reaction of market participants to potential price drops and whether whales would seize opportunities amidst panic selling.

While the outcome of these on-chain movements remains uncertain, it is evident that March holds the promise of a volatile ride for the crypto market. Investors brace themselves as they navigate through the evolving dynamics of Bitcoin’s price action and the underlying sentiments shaping the market landscape.

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