Bitcoin and Ethereum experience recovery but continue to exhibit “overheated signals” – K33 Research

Bitcoin’s recent price decline has led to concerns about an overheated market, according to analysts from crypto research firm K33 Research. In a report titled “Ahead of the Curve,” K33’s head of research, Anders Helseth, and senior analyst, Vetle Lunde, noted that the decline in Bitcoin’s price and the decreasing prices across the crypto market have exposed cryptocurrencies to amplified downside volatility. They explained that Bitcoin has lost over 13% of its value in the past week, reaching an all-time high of $73,835 on March 14. Ether and BNB Chain’s BNB have also experienced declines of 17% and 1% respectively. Despite this, futures open interest remains strong, indicating an overheated market. The analysts also highlighted the shallow or negative inflows into Bitcoin investment products as further evidence of the overheated conditions. They noted that Bitcoin exchange-traded products have seen declining inflows, with a significant net outflow of 4,453 BTC on March 18. This negative flow is mainly attributed to outflows from Grayscale’s converted Bitcoin Trust exchange-traded fund. However, the analysts cautioned that it is too early to determine whether this represents a regime change. Shallowing ETF flows have contributed to Bitcoin’s adverse price action, and traders and analysts are closely watching the key support level between $63,500 and $64,500. Charles Edwards, founder of Capriole Investments, pointed out that a normal Bitcoin bull run pullback is around 30% and expressed concerns about the recent price decline. Analyst Peter Brandt projected a drop in BTC’s price toward $50,000 based on a bearish technical setup. The macro focus this week is on the meeting of the Federal Open Market Committee in the US, which will impact not only the crypto market but also all risk assets. It is important to note that this article does not provide investment advice or recommendations, and readers should conduct their own research before making any decisions.