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Is the Bitcoin Rally Cooling Down in the Short Term? Altcoin Seasons Starts Brewing (Analysis)

Summary:
On March 8, on-chain analytics provider Santiment reported that despite the incredible milestone for Bitcoin, “there is a combined sense of exhaustion and altcoin distraction coming from the trading community right now.” BTC prices briefly topped ,000 on Coinbase on Friday marking a new all-time high for the digital asset. However, it sharply retreated from this level for the second time in a week, falling to around ,000 a few hours later. Bitcoin Fervor Fading? So far, it has been largely institutions driving momentum for crypto markets with consecutive days of high trading volumes and inflows for the newly launched spot Bitcoin ETFs. Santiment also reported that social activity, or the percentage of discussions related to BTC versus other assets, is at a fairly

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On March 8, on-chain analytics provider Santiment reported that despite the incredible milestone for Bitcoin, “there is a combined sense of exhaustion and altcoin distraction coming from the trading community right now.”

BTC prices briefly topped $70,000 on Coinbase on Friday marking a new all-time high for the digital asset.

However, it sharply retreated from this level for the second time in a week, falling to around $68,000 a few hours later.

Bitcoin Fervor Fading?

So far, it has been largely institutions driving momentum for crypto markets with consecutive days of high trading volumes and inflows for the newly launched spot Bitcoin ETFs.

Santiment also reported that social activity, or the percentage of discussions related to BTC versus other assets, is at a fairly healthy 27.5% right now. However, it is not near the euphoric levels shown when $60,000 was eclipsed less than two weeks ago.

“This is a GOOD thing. FOMO and greed are typically top signals.”

It added that previously dormant coins are continuing to move back into circulation at a rapid pace. This is one of the common factors in nearly every bull market, it stated before adding:

“Until crowd euphoria and coin stagnancy take hold on the Bitcoin network once again, market caps have a path to continue climbing.”

Crypto investor Scott Melker was bullish, telling his 946,000 X followers on March 8 that he believes that we are just at the start of a major bull run for both Bitcoin and the broader crypto market in general.

“I think that we will likely see a huge bubble and that coins with no fundamental value will also skyrocket before it inevitably pops.”

At the time of writing, crypto market capitalization was $2.72 trillion, its highest level since December 2021 and just 12% down from its all-time high.

JPMorgan on Bitcoin ETFs

In related news, JPMorgan analysts estimated the potential magnitude of the bitcoin ETF market size to reach around $62 billion. Net inflow into spot bitcoin ETFs is currently around $9.2 billion, however, some may have been rotated out of similar products such as Grayscale’s GBTC which has seen daily outflows since its conversion.

“This is a realistic target of the potential size of spot bitcoin ETFs over time perhaps within a time period of two to three years,” wrote bank analysts led by Nikolaos Panigirtzoglou.

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