Signs of Serious Correction Emerge❗❗❗
Bitcoin’s February rise fueled fear of missing out (FOMO) among investors, contributing to the rapid price increase. However, Sentiment reported that the rally’s enthusiasm might have reached a reasonable level, indicating a potential slowdown in buying pressure. It also noted significant increases in the average trading returns of both short-term and long-term active wallet addresses, which could heighten the likelihood of sell-offs due to profit-taking.
In particular, active wallet addresses trading in the last 30 and 365 days have seen noteworthy gains with returns exceeding levels not seen since April 2021. Sentiment added that such high returns, combined with data flows indicating Bitcoin whales are fragmenting their holdings, could pave the way for a short-term market correction.
While the fragmentation of Bitcoin holdings among whales does not directly indicate imminent selling pressure, it is critical as it points to a cautious approach among large investors. Moreover, Sntiment highlighted that the percentage of BTC held on cryptocurrency exchanges remains relatively low, underlining that whales have not yet moved large amounts of BTC to trading platforms.
Drawing on historical data, Sentiment emphasized that inflated average investor and trader returns, when combined with weak whale accumulation, typically precede short-term market corrections. The outcome of the latest on-chain data, including potential panic sales by investors and the reaction of whales to market dynamics, remains uncertain and will likely shape the market’s direction in the coming weeks.