Rising Bitcoin activity hints at market bottom, potential reversal

Bitcoin active addresses are nearing a three-month high, signaling a potential crypto market capitulation that may stage a price reversal from the latest correction.Active addresses on the Bitcoin network surged to over 912,300 on Feb. 28, a level not seen since Dec. 16, 2024, when Bitcoin traded for around $105,000, Glassnode data shows.The surge in active addresses may signal a “capitulation moment” for the crypto market, according to crypto intelligence platform IntoTheBlock. The firm noted in a Feb. 28 post on X:“Historically, spikes in on-chain activity have often coincided with market peaks and bottoms—driven by panic sellers exiting and opportunistic buyers.”“While no single metric guarantees a price reversal, this surge suggests the market could be at a crucial turning point,” the post added.In financial markets, capitulation refers to investors selling their positions in a panic, leading to a significant price decline and signaling an imminent market bottom before the start of the next uptrend.Bitcoin must hold above $80,500 to avoid further lossesBitcoin’s ability to remain above the $80,500 threshold may act as a “potential catalyst for market stabilization,” according to Stella Zlatareva, dispatch editor at digital asset investment platform Nexo.Zlatareva told Cointelegraph:“Options data indicates that BTC’s ability to reclaim $80,500 will be a key factor in near-term momentum. A breakout above this level could pave the way for further upside, while a failure to establish it as support may lead to further testing on the downside.”Still, Bitcoin may revisit this crucial support if its price declines below $84,000.A potential correction below $84,000 would trigger over $1 billion worth of leveraged long liquidations across all exchanges, CoinGlass data shows.Despite short-term volatility, Bitcoin’s price is closer to forming a market bottom than reaching a local top, according to Bitcoin’s market value to realized value (MVRV) Z-score — a technical indicator used to determine whether an asset is overbought or oversold.Bitcoin’s MVRV Z-score stood at 2.01 on March 1, signaling that Bitcoin’s price is approaching the green territory at the bottom of the chart, becoming increasingly oversold, Glassnode data shows.