Bitcoin Slumps 9% Amidst Overheated Market Signals
2 min read
Bitcoin Slumps 9% Amidst Overheated Market Signals
Bitcoin (BTC) has experienced a 4.5% drop in price over the last 24 hours, trading at $68,319 on March 15. This is due to the crypto market being “overheated”, according to on-chain analytics firm IntoTheBlock. The global crypto market cap has also dropped 4.1% to $2.59 trillion, triggering a sell-off across the market. Other top cryptocurrencies such as Ether (ETH), BNB (BNB), XRP (XRP), Cardano (ADA), and Dogecoin (DOGE) have also experienced price drops ranging from 2.3% to 8%. The only token to record gains among the top 10 cryptocurrencies is Solana (SOL), rising 8% in the last 24 hours.
IntoTheBlock’s data shows that funding rates for Bitcoin perpetual swaps on Binance and Bybit have reached their highest levels since October 2021. These abnormally high funding rates indicate a market skewed heavily on the long side, with buyers of these swaps paying those going short. Bitcoin futures open interest has also reached an all-time high of $35.55 billion, which can be a warning sign for the market when open interest becomes too high.
The high leverage conditions are not limited to centralized exchanges, as loans on decentralized finance (DeFi) networks have also increased. The total debt on all DeFi protocols has doubled from around $2 billion at the beginning of January to $4.15 billion on March 14. The amount of debt issued through Aave v3 on Ethereum has also increased by a factor of 2.14 year-to-date, indicating an increasing demand for leverage. IntoTheBlock warns that the DeFi ecosystem is accumulating too much risk, which may lead to a price correction in the near future.
Bitcoin holders are currently sitting on profits, with the average 90-day return for the top 20 crypto-assets being 103%. According to independent analyst Ali, investors are currently sitting on profits of 70% in their holdings. Data from IntoTheBlock shows that 86% of all Bitcoin holders are in profit at current prices, increasing the likelihood of a continued sell-off as profit-booking continues.
Solana is the real winner here, with an 8% rise!
The crypto market is so unstable. This drop in Bitcoin’s price is another reminder of the risks involved in investing in cryptocurrencies.
It’s always important to be cautious when leveraging in the crypto market. Risk management is key!
These price drops are part of the natural market cycle. Can’t expect constant gains all the time. 🔄💰
I’m glad to see Solana making gains amidst the market downturn. It’s a promising project.
Thanks for shedding light on the high leverage conditions in both centralized and decentralized exchanges. Risk awareness is crucial in crypto. ⚠️📊
The high funding rates indicate a lopsided market, but it’s a good reminder to stay cautious.
The market cap drop is a reminder of the volatility in the crypto space. Gotta buckle up for the ride! 🎢💥
It’s frustrating to see my portfolio taking a hit because of Bitcoin’s price drop. I hope it bounces back soon, but I’m not holding my breath.
It’s amazing how quickly the crypto market can change. Gotta stay nimble and adapt to the trends. 🌐✨
This price drop is making me doubt my decision to invest in Bitcoin. It’s hard to stay optimistic when the market is so volatile.
The increase in Bitcoin futures open interest is a sign of growing interest in the market.