Bitcoin (BTC) is currently priced at $68,319 on March 15th, experiencing a 4.5% decrease over the past 24 hours. This decline is attributed to the “overheated” state of the crypto market, as reported by on-chain analytics firm IntoTheBlock.
According to data from Cointelegraph Markets Pro and TradingView, BTC’s price dropped by 9% from its recent all-time high of $73,835 on March 14th, reaching a new weekly low of $65,565 on March 15th.
This drop in Bitcoin’s price has triggered a sell-off across the market, resulting in a 4.1% decrease in the global crypto market cap to $2.59 trillion, according to CoinMarketCap.
Ether (ETH), the second-largest cryptocurrency by market capitalization, has also experienced a 5% drop in the past 24 hours, currently priced at $3,708. Other top-cap tokens such as BNB, XRP, Cardano, and Dogecoin have also seen decreases of 2.3%, 7.3%, 5.8%, and 8% respectively during the same period.
However, Solana (SOL) is the only token among the top 10 cryptocurrencies that has recorded gains, rising by 8% in the past 24 hours.
Earlier, Cointelegraph had warned about a possible correction in BTC’s price due to the “overheated” market conditions. This information is supported by data from IntoTheBlock, which highlights the increasing leverage in the crypto market, indicating a potential correction.
In this week’s On-chain Insights newsletter, IntoTheBlock reveals that the funding rates for Bitcoin perpetual swaps on Binance and Bybit reached their highest levels since October 2021. These fees, paid every 8 hours, translate to an annualized cost of 93% and 168% for going long on Bitcoin.
Furthermore, Bitcoin futures open interest on all exchanges reached its all-time high of $35.55 billion on March 15th, according to data from Coinglass. While high open interest reflects new buying in the market, it also poses a warning sign for the market when it becomes too high.
The high leverage conditions are not limited to centralized exchanges, as loans on DeFi networks have also risen sharply. The total debt on all DeFi protocols has doubled since the beginning of the year, reaching $4.15 billion on March 14th. Additionally, the amount of wrapped Bitcoin (WBTC) supplied to Aave has increased by over 10,000 BTC (~$700M) in 2024.
These increasing debt levels in the DeFi ecosystem indicate a potential risk and may lead to a price correction in the near future.
Despite the recent price decrease, Bitcoin holders are still sitting on profits. The average 90-day return for the top 20 crypto-assets is 103%, indicating that most traders have realized profits from their investments. According to data from IntoTheBlock, 86% of all Bitcoin holders are currently in profit, increasing the likelihood of further profit-booking and a continued sell-off in the short term.
It’s important to note that this article does not provide investment advice or recommendations, and readers should conduct their own research before making any decisions.