According to Cointelegraph: Bitcoin (BTC) has experienced a 9% decrease from its record high, as market participants show indications of profit-booking amid concerns that the market might be "overheated." As of March 15, BTC's price is $68,319, down 4.5% over the previous day.
IntoTheBlock, an on-chain analytics firm, has indicated that the market conditions might be overheated. Following BTC's decline, altcoins have seen a downward trend, with Ether (ETH), Binance Coin (BNB), Ripple's XRP, Cardano's ADA, and Dogecoin (DOGE) also recording losses over the same period.
The slump in Bitcoin's price led to a dip in the global crypto market cap by 4.1% to rest at $2.59 trillion. Amid these market conditions, only Solana (SOL), recording an 8% increase in the last 24 hours, managed to stand out.
There were previous warnings about a possible correction due to overheated conditions. Market intelligence firm IntoTheBlock noted an increase in leverage in the crypto market, a warning sign of a price correction. Funding rates have reached their highest level since October 2021. The fees for Bitcoin long positions translate to an annualized cost of 93% and 168%, suggesting a market skewing heavily on the long side.
The high-leverage market conditions are spreading beyond centralized exchanges, with outstanding loans on decentralized finance (DeFi) networks, demonstrated by a sharp increase in total debt.
Owing to the above factors, the risk in the crypto market, especially the DeFi ecosystem, is building up, paving the way for a potential price correction. Despite the current dip, most investors are profiting from their holdings, with data from IntoTheBlock indicating that 86% of Bitcoin holders are in profit at current prices.
