Bitcoin Approaches All-Time High as Correction Looms
The price of Bitcoin has been on an impressive upward trend, nearing its previous all-time high. However, Daniel Yan, co-founder of Matrixport, is warning crypto investors to exercise caution as he believes a correction is imminent. Yan predicts that the market could retrace by as much as 15% in April, coinciding with the highly anticipated Bitcoin halving event.
Euphoria in the Crypto Market
Yan points out that the overall sentiment in the crypto industry is currently one of euphoria. The total market capitalization of cryptocurrencies has surpassed $2.3 trillion, experiencing a 6% increase in just one day according to CoinGecko. Despite this positive momentum, Yan advises vigilance as March is historically known for its unpredictability in the cryptocurrency market.
“I think it will happen in the next month or so, as March is a tricky one from a macroeconomic perspective already (Fed meeting and BTFP). With the Dencun mainnet upgrade soon behind us and Bitcoin halving before us, the month of March could be vulnerable.” – Daniel Yan, Matrixport co-founder
Yan emphasizes that it remains uncertain whether a new all-time high (ATH) for Bitcoin will be reached before the correction or vice versa. However, he reassures long-term holders that there is little cause for concern. On the other hand, short-term traders should remain alert in the coming month.
Bitcoin Surpasses $62,000
Yan’s warning comes as Bitcoin breaks through the $62,000 barrier for the first time since late 2021. Within a span of 24 hours, BTC experienced a gain of over 9%, reaching a 28-month high just weeks before the halving event.
Many attribute the surge in Bitcoin’s price to the increasing demand for spot BTC ETFs. SoSoValue reports that spot BTC ETFs saw net inflows of $576 million on February 27, with BlackRock’s IBIT product alone receiving a record-breaking $520 million in single-day net inflows.
BlackRock’s spot Bitcoin ETF has seen an influx of over $6.5 billion since its official trading launch on January 11. The financial giant currently holds more than $8 billion worth of BTC in Coinbase custody for its exchange-traded fund.
Hot Take: Brace Yourself for a Correction
As Bitcoin continues its upward trajectory, it is crucial for crypto investors to be prepared for a potential correction in the near future. While the market is currently experiencing significant gains and excitement, experts like Daniel Yan are warning of a possible downturn. Here are some key takeaways to keep in mind:
1. Market Retrace Expected
- Daniel Yan, co-founder of Matrixport, predicts a market retrace of up to 15% in April.
- The anticipated Bitcoin halving event adds to the likelihood of a correction.
2. Exercise Caution in March
- The month of March historically brings uncertainty to the cryptocurrency market.
- Macroeconomic factors such as the Fed meeting and BTFP could contribute to market volatility.
3. Long-Term Holders Have Less to Worry About
- If you are a long-term holder of Bitcoin, there is little cause for concern during this potential correction.
- The overall bullish sentiment surrounding Bitcoin suggests that any downturn may be temporary.
4. Stay Alert as a Short-Term Trader
- Short-term traders should remain vigilant and closely monitor market trends in the coming month.
- Be prepared to react swiftly to any significant price movements.
While the crypto market continues to generate excitement and optimism, it is important to approach it with caution and a realistic understanding of potential risks. By staying informed and proactive, you can navigate the market’s ups and downs with confidence.
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