The Americas crypto market is experiencing a period of adjustment, with bitcoin’s price declining and sparking concerns among investors. However, historical data suggests that this market correction is a normal part of the cycle.
The recent decline in bitcoin’s price has left many investors wondering whether to ‘buy the dip‘ or panic. However, a closer look at historical data suggests that this market correction is nothing out of the ordinary.
In previous cycles, bull-market corrections have sent bitcoin tumbling as much as 35%. Given that BTC hasn’t had a meaningful pullback since last August, the current situation is almost normal. CoinDesk research showed that bitcoin was trading in an extremely tight range for a meaningful period, and a break in the channel was inevitable.
On-chain data tells us that bitcoin recently bounced off its 200-day-moving average or roughly $81,800. While short-term holders are selling at the highest level since August, this is usually seen as a signal of some form of capitulation in the market.
Market Movements
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BTC is up 3% from 4 p.m. ET Wednesday at $86,735.19 (24hrs: -2.12%)
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ETH is up 1.98% at $2,378.49 (24hrs: -3.49%)
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CoinDesk 20 is up 2.98% at 2,821.02 (24hrs: -1.13%)
Key Events
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Feb. 27: Solana-based L2 Sonic SVM (SONIC) mainnet launch (“Mobius”)
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March 1: Spot trading on the Arkham Exchange goes live in 17 U.S. states
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March 5 (provisional): Testing of Ethereum’s Pectra upgrade on the Sepolia testnet starts
Token Talk
Pump.fun, a Solana-based memecoin launchpad, has seen a sharp decline in token launches and graduations amid a falling market. The platform hit a peak in October 2024, creating over 36,000 tokens in a day and generating a record $3 billion market cap for its ecosystem, but activity has since plummeted, with daily token launches dropping more than 60%.
Derivatives Positioning
Open interest in perceptual futures tied to APT, one of the best-performing coins of the past 24 hours, has increased, but funding rates and the cumulative volume delta are negative. That’s a sign of traders hedging downside risks.
Technical Analysis
BTC’s daily chart shows a double top breakdown, exposing the former resistance-turned-support below $74,000. On the price chart, there is no other support between $90K and $74K.
Technical analysis is a method of evaluating securities by analyzing statistical patterns and trends in their price movements.
It involves identifying charts, graphs, and other visual tools to predict future price movements.
Technical analysts believe that market prices reflect all available information, making it possible to forecast future price movements with accuracy.
Key indicators include moving averages, relative strength index (RSI), and Bollinger Bands.
By applying these techniques, investors can make informed decisions and stay ahead of the market.
Crypto Equities
MicroStrategy (MSTR): closed on Wednesday at $263.27 (+5.09%), up 2.82% at $270.70 in pre-market
Coinbase Global (COIN): closed at $212.96 (+0.22%), up 3.22% at $219.81
ETF Flows
Spot BTC ETFs:
Daily net flow: -$754.6 million
Cumulative net flows: $37.13 billion
Total BTC holdings ~ 1,139 million.
Stablecoin tether: net exchange outflows (CryptoQuant)
The chart shows a large outflow of the Tether’s dollar-pegged stablecoin USDT from centralized exchanges. It may be a sign of traders preparing for deeper market downturns or rotation of liquidity out of centralized avenues into decentralized platforms.
A stablecoin is a type of digital currency pegged to a fiat currency, such as the US dollar.
It aims to maintain a stable value by using algorithms and reserves to regulate its supply.
Stablecoins are designed to reduce volatility in cryptocurrency markets and provide a more stable store of value.
They are commonly used for cross-border transactions, remittances, and trading on cryptocurrency exchanges.
