Bitcoin’s latest rally is edging into overheated territory, with fresh on-chain data pointing to a possible market peak on the horizon.
According to new insights from CryptoQuant, the Bitcoin Bull and Bear Market Cycle Indicator places the asset firmly in a bullish zone. However, the same indicator is now nearing the overheated bull threshold—a region historically tied to increased risks of price corrections and sudden pullbacks.
This development is raising concerns among market participants. An overheated bull zone typically indicates that price gains have accelerated too rapidly, often prompting a wave of profit-taking or a temporary cooling-off period. While the overall market trend remains positive, analysts caution that this phase may not be ideal for opening large positions. Consequently, many investors are choosing a wait-and-see approach, holding back until clearer signs of a correction emerge.
This shift in sentiment is already being reflected in trading behaviour. Speculators appear to be reducing exposure, gradually locking in profits amid fears that the current upward momentum could soon stall.
Despite these concerns, longer-term data continues to support a bullish outlook. Bitcoin’s moving averages, ranging from 30 to 365 days, still point upward. These indicators suggest that, unless disrupted by unexpected macro events, the market could push further into overheated territory before reversing course.
Historically, market entries during overheated phases have resulted in short-term price spikes followed by swift corrections. As such, traders are closely watching for any signals of momentum loss that could mark the beginning of a broader shift.
Amid these cautionary signals, there are also signs of renewed strength. In a June 25 analysis, CryptoQuant contributor İbrahim COŞAR noted that Bitcoin has reclaimed its 50-day exponential moving average (EMA). This key technical level often marks the onset of short-term rallies and may signal the potential for further upside, especially if macroeconomic trends continue to support risk-on sentiment.
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