Will the Bitcoin Rally Cool Down in the Short Term? Altcoin Seasons Begin Brewing (Analysis)

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

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

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

Is the enthusiasm for Bitcoin waning?

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

Santiment also reported that social activity, which is the percentage of discussions about BTC compared to other assets, is currently at a pretty good 27.5%. However, it doesn't come close to reaching the euphoric levels seen when it broke $60,000 less than two weeks ago.

“That's a good thing. FOMO and greed are typically top signals.”

It added that previously dormant coins continue to come back into circulation at a rapid pace. This is one of the common factors in almost every bull market, it said, adding:

“Until mass euphoria and coin stagnation take over the Bitcoin network again, there is a path for market cap to continue rising.”

Crypto investor Scott Melker was optimistic and shared his 946,000

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

At the time of writing, the cryptocurrency market cap was $2.72 trillion, its highest level since December 2021 and just 12% below its all-time high.

JPMorgan on Bitcoin ETFs

In related news, analysts at JPMorgan estimated that the potential size of the Bitcoin ETF market will reach approximately $62 billion. Net inflows into spot Bitcoin ETFs currently stand at around $9.2 billion, but some may have been expelled from similar products such as Grayscale's GBTC, which has seen daily outflows since its conversion.

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

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