Bitcoin (BTC) is trading at $68,319 on March 15, down 4.5% over the last 24 hours as the crypto market displays overheated conditions, according to a report by on-chain analytics firm IntoTheBlock. <\/p>\n
Data from Cointelegraph Markets Pro and TradingView shows that the price of BTC turned down from its latest all-time high of $73,835 on March 14, dropping 9% to a new weekly low of $65,565 on March 15. <\/p>\n
The drop in Bitcoins price has also triggered a sell-off across the market, with the global crypto market cap dropping 4.1% on the day to rest at $2.59 trillion, according to data from CoinMarketCap. <\/p>\n
The second largest cryptocurrency by market capitalization, Ether (ETH), has also dropped 5% in the last 24 hours to $3,708. Other top-cap tokens were also flashing red, with BNB (BNB), XRP (XRP), Cardanos ADA (ADA) and Dogecoin (DOGE) losing 2.3%, 7.3%, 5.8%, and 8% of their value, respectively, over the same period. <\/p>\n
Solanas SOL (SOL) was the only token among the top 10 cryptocurrencies recording gains, rising 8% over the last 24 hours. <\/p>\n
Previously, Cointelegraphwarned of a possible correction in the BTC price due to overheated conditions, as summarized by X user TOBTC. <\/p>\n
Data from market intelligence firm IntoTheBlock corroborates this information, highlighting growing leverage in the crypto market, which presents warning signs of a correction. <\/p>\n
In this weeks On-chain Insights newsletter, IntoTheBlock reveals that the amount that buyers of Bitcoin perpetual swaps pay those going short is at its highest since October 2021. <\/p>\n
In the chart below, IntoTheBlock analysts note BTCs funding rates on Binance and Bybit reached levels of 0.06% and 0.09% yesterday, paid every 8 hours. <\/p>\n
These fees translate to an annualized cost of 93% and 168% in order to go long Bitcoin, the report added. <\/p>\n
More data from Coinglass reveals that Bitcoin futures open interest (OI) on all exchanges reached its all-time high of $35.55 billion on March 15. <\/p>\n
While high OI reflects new buying in the market fueled by increasing inflows into the spot Bitcoin exchange-traded funds (ETFs), overly bullish positioning in derivatives posts a warning sign for the market when open interest grows too high, as IntoTheBlock analysts point out. <\/p>\n
The high-leverage conditions are extending beyond centralized exchanges, with loans on decentralized finance (DeFi) networks rising sharply. <\/p>\n
The chart below shows that the total debt on all DeFi protocols has doubled in 2024. According to additional data from IntoTheBlock, the total debt increased from around $2 billion at the beginning of January to reach $4.15 billion on March 14. <\/p>\n
IntoTheBlock also reports an uptick in the aggregate amount of debt issued through Aave v3 on Ethereum, which has increased by a factor of 2.14 year-to-date. <\/p>\n
The amount of wrapped Bitcoin (WBTC) supplied to Aave has increased by more than 10,000 BTC (~$700M) so far in 2024, the report added. <\/p>\n
This means the rates in DeFi have increased with increasing demand for leverage. <\/p>\n
As such, the firm warns the DeFi ecosystem is accumulating too much risk, which might lead to a price correction in the near term. <\/p>\n
Related: Bitcoin shorts stay absent amid 'very normal' sub-$66K BTC price dip <\/p>\n
BTC price breached multiple all-time highs in March in an uptrend largely influenced by the success of the spot Bitcoin ETFs in the United States. <\/p>\n
Pointing to overheated conditions, the report by IntoTheBlock notes that the average 90-day return for the top 20 crypto-assets (excluding stablecoins) [...] is 103%. <\/p>\n
This means that most traders have realized profits from their crypto investments. According to independent analyst and X user Ali, investors are currently sitting on profits of 70% in their holdings. <\/p>\n
In a March 14 post on X, analyst Ali shared the following chart from CryptoQuant showing that traders unrealized profit margins reached 69% when the price hit higher highs above $73,000, which is historically associated with upcoming corrections as traders embark on booking profits. <\/p>\n
Ali said: <\/p>\n
More data from IntoTheBlock shows that 86% of all Bitcoin holders are in profit at current prices, increasing the chances of a continued sell-off in the short term as profit-booking continues. <\/p>\n
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. <\/p>\n
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Bitcoin drops 9% from its ATH as the market shows signs of being 'overheated' - Cointelegraph<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Bitcoin (BTC) is trading at $68,319 on March 15, down 4.5% over the last 24 hours as the crypto market displays overheated conditions, according to a report by on-chain analytics firm IntoTheBlock. Data from Cointelegraph Markets Pro and TradingView shows that the price of BTC turned down from its latest all-time high of $73,835 on March 14, dropping 9% to a new weekly low of $65,565 on March 15. The drop in Bitcoins price has also triggered a sell-off across the market, with the global crypto market cap dropping 4.1% on the day to rest at $2.59 trillion, according to data from CoinMarketCap. Continue reading