Is Crypto Getting Too Bullish?

Bitcoin dips after three days of massive gains! What ecosystems played catchup today, and are there signs the rally may be overextended?

Despite taking a break from pumping, Bitcoin’s sharp rally over the past three days positions it for an all-time high monthly close should BTC manage to finish out the day above $61.3k.

While this bout of sudden strength in BTC has caused ETH/BTC to trade lower in recent days, today’s weakness allowed Ether to shine through, with the Ratio increasing by 2%.

Throughout February, the Solana ecosystem bled to BTC, but SOL/BTC also found its legs today, ripping by 12% to touch the downtrend that has plagued SOL HODLers during the month.

SOL strength has taken the ecosystem’s core culture coin along for the ride, with the price of BONK surging over 40% on the day for a weekly gain of nearly 100%!

While alt bulls are relishing today’s bout of strength, weakness in BTC, the rally’s leader on the way up, and a sell-off in crypto equities, which can be a leading indicator for token prices, suggest that the market may be due for a correction…

Funding rates on crypto perpetuals have become so exceedingly extended that data provider Velo was forced to add a new color to their funding rate heat map! As funding rates increase, levered longs, who must make massive payments to shorts to hold their positions open, face the increasing probability of liquidation should prices stagnate or move against them.