Bitcoin (BTC), which has been on the rise since the beginning of March, has reached its highest level since the beginning of June 2022.
The world's largest cryptocurrency is currently trading close to $30,000, a psychological barrier that many users want to break.
Analysis Platform Santiment Evaluates Bitcoin's Latest Rally
According to Santiment, a market research platform, Bitcoin's recent rally was supported by strong trading volume, indicating healthy demand and momentum. However, the platform also warned that there are signs of exhaustion and overconfidence in the market that could lead to a correction.
Santiment points out that Bitcoin's social volume and social dominance, an indicator that measures the amount and share of online conversations about BTC, is at a one-year high.
Another indicator that Santiment is tracking is the stagnant circulation of Bitcoin, which shows the number of coins that have not moved for at least five years and are starting to move again. The platform notes that since mid-March, there have been two increases in this metric between 2,800 and 3,000 BTC each.
This may indicate that some long-term holders are feeling nervous about regulatory pressure on crypto or a legal lawsuit against one of the largest crypto exchanges, Binance.
Santiment also observes that wrapped Bitcoin (WBTC) borrowing on Aave, a decentralized lending platform, has increased recently.
WBTC is a tokenized version of Bitcoin that runs on Ethereum, allowing users to access decentralized finance (DeFi) applications.
Santiment says that most of the WBTC borrowers have probably shorted Bitcoin and believes its price will drop. However, the platform notes that this strategy has backfired in the past as the highest increases in WBTC borrowings coincided with local bottoms for Bitcoin.
*Not investment advice.