Analysts Predict Bitcoin Approaching Overheating Zone

The price of Bitcoin has yet to reach its peak levels. Nonetheless, researchers from various firms are noting signs of market overbought conditions, which could potentially lead to a significant correction.

Swissblock has highlighted insights regarding the Optimal Signal indicator from Bitcoin Vector.

According to the Optimal Signal from @bitcoinvector, each of the last significant BTC growth phases extended between 15 to 30 days.

Currently, we are on day 12, with capital also beginning to shift towards $ETH.

This cycle appears to be unfinished. pic.twitter.com/iFUoaYzNjW

«Every major upward surge in Bitcoin has lasted about 15 to 30 days. We are currently on day 12, and some capital is starting to flow into Ethereum,» the experts shared.

Moreover, the unrealized profits of short-term holders are notably lower than the figures recorded during previous peaks in January and April 2024.

2/ @glassnode’s Short-Term Holder Relative Unrealized Profit remains significantly below previous cycle peak thresholds (Jan & Apr 2024).

Currently, the market participants are not showing indicators of excessive profit-taking or euphoria—at least not yet. pic.twitter.com/5kxiaMahKg

«Market players have not yet exhibited mass profit realization or signs of euphoria,» noted Swissblock.

The Speculation Index developed by on-chain expert Willy Woo, alongside the VWAP Liquidity metric, also indicate that the market is not yet experiencing overheating.

3/ Both @woonomic’s Speculation Index and VWAP Liquidity confirm that the market is not yet overheated.

Each indicator has not reached the extreme values recorded in previous cycles, suggesting ongoing support for higher prices. pic.twitter.com/IInMgJYaFI

«Both indicators are significantly shy of the extreme levels seen in past cycles, suggesting continued growth potential,» explained the experts.

In addition, researchers at Glassnode added several metrics that «help identify the current phase of the cycle and explain why caution is advisable in the near term.»

Is $BTC nearing its peak? Not yet. In line with the recent analysis by @swissblock__, we present five additional data points that help assess our position in the cycle and highlight the reasons for exercising caution: https://t.co/uRG2RAklIl pic.twitter.com/dyx2HVsfn6

The recent rise in Bitcoin above $122,000 has brought the price close to a level exceeding the cost basis for short-term holders by one standard deviation.

The recent rally to $122k has brought #Bitcoin to nearly 1 standard deviation above the cost basis of short-term holders. If this momentum persists, the next critical level to watch is $136k (2 +std), a zone that has historically signified increased profit-taking and local market peaks. pic.twitter.com/Thl6yetTrY

«If this trend continues, the next significant benchmark could be the $136,000 level (+2 standard deviations). This zone has previously been associated with active profit realization and the establishment of local highs,» the experts speculated.

They observed that the new historical peak coincided with a moment when the entire volume of coins held by short-term holders was «in profit.»

The recent surge leading to a new all-time high at $122k coincided with 100% of the supply held by short-term holders being in profit. This surpasses the 88% threshold that typically indicates the transition from a heated market to an overheated, high-risk euphoric phase. pic.twitter.com/pxDSsVsCvw

«This indicator has exceeded the critical 88% level, traditionally suggesting the market is shifting from a heated state to an overheated phase characterized by high risk and widespread euphoria,» researchers cautioned.

Amid the price increase above $120,000, the volume of Bitcoin spent profitably by short-term holders (7 EMA) reached 82%—well above the overbought threshold of 62%.

As prices surged past $120k, the 7-day EMA of the volume spent at a profit by short-term holders reached 82%, significantly higher than the overheating threshold of 62%. Such spikes often occur multiple times during bull markets, but repeated signals at these levels usually precede local tops and warrant… pic.twitter.com/uRQqQ724MO

«Such spikes frequently accompany bull cycles, but their recurrence at this level often indicates the proximity to local peaks and serves as a caution signal,» stated Glassnode.

The realized profit-to-loss ratio of short-term holders (7-day MA) has surged to 39.8— a figure significantly above typical levels of market overheating.

Additionally, the ratio of realized profit to realized losses among short-term holders (7-day EMA) soared to 39.8x—well above the statistical boundary indicating an overheated market. Although this figure is extreme, similar conditions have historically appeared several times before a final cycle peak is reached. pic.twitter.com/frPWU7Mils

«Despite the extremely high value, similar indicators have been observed ahead of final peaks in previous cycles,» analysts emphasized.

The recent breakout from a multi-month range has occurred following accumulation in the zones of $93,000–$97,000 and $101,000–$109,000, evident from the CBD heatmap.

The recent breakout from a prolonged range followed significant accumulation zones between $93k and $97k and $101k to $109k, as outlined on the CBD Heatmap. These clusters of supply are likely to provide robust support should a market correction occur. pic.twitter.com/7KIlCHtE9d

These supply clusters are very likely to serve as strong support in case of a correction.

In conclusion, Glassnode experts have confirmed that Bitcoin has entered an overheated zone. They noted that historically, cycle peaks «have formed with a delay,» which left room for further growth.

«However, the risk is increasing, and the market is becoming more sensitive to external shocks. The current correction aligns with this pattern,» they summarized.

CryptoQuant analyst Crypto Dan is confident that the market is not yet overheated.

«Unlike in March and December 2024, on-chain metrics are not signaling market overheating yet,» he stated.

The lack of overbought conditions «compared to prior short-term peaks» suggests the likelihood of a new all-time high (ATH) and the continuation of the rally into the second half of 2025.

«The potential for upward movement remains intact,» Crypto Dan concluded.

Additionally, CryptoQuant researcher Crazzyblock warned about whale preparations for selling and the impending volatility of Bitcoin.