Here’s what to expect in March Bitcoin’s Rally to $64K: After Sentiment

Analysts at crypto intelligence platform Sentiment said Bitcoin's impressive 29-day leap year last month gave new meaning, but the market could be on a different journey in March.

According to Sentiment's monthly report, several indicators on the chain suggest that the market is in a bit of a danger zone and faces the risk of a correction in the short term.

A bit of a danger zone

Bitcoin surged 45% in February, topping $45,000, $50,000, $55,000 and $60,000 in three weeks. The property was last sold at $64,000 and was hovering around $62,000 at the time of writing, according to data from CoinMarketCap.

The euphoria of the rally has sparked a fear of missing out (FOMO) among market participants, albeit to a fair degree.

In addition to FOMO, long-term and short-term active wallets may start selling their BTC as their average trading income increases significantly. In the last 30 days, active wallets have recorded gains of over 20%, although the figure has fallen to 14% at press time.

Over the past 365 days, active wallets have seen a return of over 64% (59 at the time of writing), the highest since April 2021. These returns were not even recorded in November 2021, when BTC reached an all-time high.

The possibility of a short-term correction

Additionally, Bitcoin whales are showing signs of splitting their holdings. Sentiment says this happens when whales move or transfer a portion of their assets to an exchange to sell or hold. Also, they may be interested in transferring their coins to multiple wallets for security. Fortunately, the percentage of BTC on exchanges is still at 2017 levels. So the properties are not yet transferred to the platforms.

Historical data shows that an extremely inflated average trader's return combined with a weak well stock can lead to a short-term correction.

“Then it really depends on the population. Do they start to panic? Will the recent traders who bought at $63k sell immediately if the price drops to $55k? If the smaller traders really panic sell, will the whales take those coins? Will the average dollar invested age line fall when prices stop rising? Santiment explained.

While the results of recent moves on the chain remain to be seen, the crypto market is undeniably on a wild march.