Bitcoin continues to experience unprecedented demand in the crypto market. According to insights from CryptoQuant’s Julio Moreno, a significant net inflow of 54,600 BTC occurred on March 1 into Bitcoin hoarding addresses, which are known for only receiving Bitcoin without any outgoing transactions. This influx set a new record for the highest daily entry volume in Bitcoin history.
Despite this surge in demand, experts caution that certain indicators point to a potential overheating phase in the market. The Bitcoin bull-bear cycle indicator signaled an overheated bull phase when prices soared to $60,000, entering what is commonly referred to as the ‘red area’. This phase typically signifies a potential market downturn, signaling a need for caution.
Furthermore, the current scenario shows that Bitcoin miners are receiving excessive rewards, indicating overheating conditions. This situation often leads to increased selling pressure in the market, potentially triggering a price correction in the near future. Additionally, traders’ unrealized profit margins have reached exceptionally high levels, hovering around 45%. Such elevated levels of unrealized profits may prompt traders to capitalize on their gains, increasing the likelihood of a market sell-off.
In summary, while the demand for Bitcoin remains robust, several indicators suggest that the market may be entering a phase of overheating. It is essential for participants to stay informed and exercise caution in their investment decisions.
*Please note that this information is shared for educational purposes and should not be considered as investment advice.
