Bitcoin Active Addresses Surge, Indicating Potential Market Shift

According to Cointelegraph, Bitcoin's active addresses have reached a near three-month high, suggesting a possible market capitulation that could lead to a price reversal following the recent correction. Data from Glassnode reveals that active addresses on the Bitcoin network surged to over 912,300 on February 28, a level not observed since December 16, 2024, when Bitcoin was valued at approximately $105,000. The increase in active addresses may indicate a 'capitulation moment' for the cryptocurrency market, as noted by the crypto intelligence platform IntoTheBlock. The firm highlighted in a February 28 post that historically, spikes in on-chain activity have often aligned with market peaks and bottoms, driven by panic sellers exiting and opportunistic buyers entering the market. While no single metric can guarantee a price reversal, this surge suggests the market could be at a critical turning point. In financial markets, capitulation refers to investors selling their positions in panic, leading to a significant price decline and signaling an imminent market bottom before the start of the next uptrend. Bitcoin's ability to maintain a position above the $80,500 mark is crucial to avoid further losses. Stella Zlatareva, dispatch editor at digital asset investment platform Nexo, emphasized that Bitcoin's ability to reclaim $80,500 will be a key factor in determining near-term momentum. A breakout above this level could pave the way for further upside, while failing to establish it as support may lead to further testing on the downside. Bitcoin may revisit this crucial support if its price falls below $84,000. A potential correction below $84,000 could trigger over $1 billion worth of leveraged long liquidations across all exchanges, according to CoinGlass data. Despite short-term volatility, Bitcoin's price is closer to forming a market bottom than reaching a local top, as indicated by Bitcoin's market value to realized value (MVRV) Z-score. This technical indicator is used to determine whether an asset is overbought or oversold. On March 1, Bitcoin's MVRV Z-score stood at 2.01, signaling that Bitcoin's price is approaching the green territory at the bottom of the chart, becoming increasingly oversold, according to Glassnode data.