Bitcoin’s network activity is surging, suggesting a possible market capitulation that could precede a price reversal. Active addresses on the Bitcoin network reached over 912,300 on February 28, the highest level since December 16, 2024, when Bitcoin was trading around $105,000, according to data from Glassnode.
Bitcoin’s Surge in Active Addresses Signals Capitulation
The sharp rise in active addresses may indicate a crucial turning point for the crypto market. Crypto intelligence firm IntoTheBlock noted that historically, spikes in on-chain activity often align with market peaks and bottoms, driven by panic sellers exiting and opportunistic buyers stepping in.
“While no single metric guarantees a price reversal, this surge suggests the market could be at a crucial turning point,” IntoTheBlock stated in a February 28 post on X.
Capitulation, in financial terms, refers to a scenario where investors sell off their holdings in panic, triggering a sharp decline that typically marks a market bottom before a new uptrend begins.
Bitcoin Must Hold Above $80,500 for Market Stability
As Bitcoin’s price hovers around $86,000, analysts highlight $80,500 as a critical support level for avoiding further declines. According to Stella Zlatareva, dispatch editor at digital asset investment platform Nexo, Bitcoin’s ability to reclaim and hold above this level could act as a stabilizing factor for the market.
“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,” Zlatareva told Cointelegraph.
However, if Bitcoin’s price falls below $84,000, it could lead to a significant wave of liquidations. Data from CoinGlass suggests that a correction under this level would trigger over $1 billion worth of leveraged long liquidations across all exchanges, potentially adding to market volatility.
Technical Indicators Point to a Market Bottom
Despite recent price fluctuations, Bitcoin appears to be closer to forming a market bottom rather than reaching a local top, according to its Market Value to Realized Value (MVRV) Z-score. This indicator helps assess whether Bitcoin is overbought or oversold.
Glassnode data shows that Bitcoin’s MVRV Z-score stood at 2.01 on March 1, signaling that the asset is approaching the green zone on the chart—indicating an oversold condition. Historically, such levels have often preceded bullish reversals.
Bitcoin’s Next Move: Rebound or Further Correction?
As Bitcoin consolidates, traders are closely watching key resistance and support levels. Analysts suggest that if Bitcoin breaks above $86,500 with strong volume, it could rally toward $88,000. Conversely, increased selling pressure could push Bitcoin back toward $84,000, potentially leading to further downside tests.
With Bitcoin’s network activity rising and technical indicators suggesting an oversold market, traders are bracing for a potential market shift. Whether Bitcoin sees a significant rebound or another dip remains to be seen, but growing on-chain activity could be a sign that the next move is on the horizon.
