After the leading cryptocurrency Bitcoin reached $69,000 on March 5, it encountered strong selling pressure and fell to $59,000.
While some analysts think that BTC has found strong support during this correction and the rise will continue, some analysts think that the correction will continue further.
While there was a dilemma about whether the rise in Bitcoin would continue or not, CryptoQuant analysts evaluated the current situation and data in BTC.
Sharing a detailed post from the X account, CryptoQuant analysts discussed overheating signals and correction risks that should not be overlooked, despite the current upward momentum in Bitcoin.
In other words, analysts argue that despite the current upward momentum in Bitcoin, some data points to a correction.
Accordingly, he said that the Bull-Bear Market Cycle Indicator, excessive profitability rates of miners and short-term investors starting to sell indicate overheating in Bitcoin and are a correction signal for the price.
“There are overheating signals in Bitcoin and correction risks that should not be overlooked.
Despite the current bullish momentum in Bitcoin, many indicators point to potential overheating. Let's examine them:
1-CryptoQuant's Bullish-Bearish Market Cycle Indicator marked the Overheated Bullish phase as prices surged above $65,000, which could be a possible correction signal for BTC.
2-Miners are now earning extremely high income and profitability is reaching its highest level since December 2023. This may be a signal that miners may sell and BTC corrects with selling pressure.
3-Investors' unrealized profit margins have reached 57%, an alarming rate that has historically been associated with impending corrections.
Additionally, short-term investors began selling at the highest profit margins since February 2021, potentially heralding increased selling pressure.”
#Bitcoin overheating signals and correction risks that shouldn't be overlooked 🧵
Despite the bullish momentum, several indicators signal potential overheating. Let's dive into them ⬇️
— CryptoQuant.com (@cryptoquant_com) March 8, 2024
*This is not investment advice.
