Daniel Yan, co-founder of Matrixport, published a warning this week that the Bitcoin market is showing signs of euphoria and overheating, indicating that a correction of around 15% could occur in the coming weeks.
Yan’s comments come as the price of Bitcoin surged past $64,000 for the first time since 2021, sparking a frenzy among investors. The Crypto Fear & Greed Index also shows a score of 85, signaling extreme greed in the market.
This surge follows approvals of several spot Bitcoin ETFs by the U.S. Securities and Exchange Commission this January.
Yan points to the month of March as being “tricky” from a macroeconomic perspective. Upcoming events like a Federal Reserve meeting, the Bitcoin halving, and Ethereum’s Dencun upgrade could inject uncertainty and volatility into markets.
Other analysts like Arthur Hayes, Co-Founder of BitMEX, share a similarly cautious outlook. Hayes predicts Bitcoin could fall below $35,000 due to global macroeconomic and political risks.
Factors like Fed policies, inflation, and the 2024 U.S. presidential election could negatively impact assets like cryptocurrencies in the coming months.