Bitcoin Bulls Charge Ahead as Key Metrics Flash Red: CryptoQuant Warns of Overheating

While Bitcoin’s price action stays firmly in bullish territory, on-chain analysts are sounding alarms. CryptoQuant data reveals multiple metrics hitting unsustainable levels—classic signs of a market running too hot, too fast.

When the numbers scream ’overbought’ but the rally won’t quit, even seasoned traders get nervous. Remember: what goes up must come down—unless you’re a central bank printer, of course.

Demand Metrics Are Overheating

CryptoQuant analysts report that BTC balances held by whales have increased by 2.8% over the past month. They also estimate Bitcoin’s demand growth to be at 229,000 BTC within the same time frame. This figure is close to the demand growth recorded in December 2024 at 279,000 BTC when the cryptocurrency surged past $100,000 for the first time.

Such paces often precede a slowdown in whale accumulation, and as analysts always say, BTC needs strong demand to sustain a rally.

Additionally, the Bitcoin Traders’ Unrealized Profit Margin has approached a level that often indicates potential resistance for prices. According to historical data, bitcoin’s price surge tends to slow down whenever the metric nears 40% or crosses below its 30-day moving average, which is currently at 19%.

At the time BTC rallied past $111,000 last week, the margin hit 32%. This means it got close to 40%, which is the level marked for overheating.

Bitcoin Falls Below $104K

Analysts believe $120,000 could be the next major resistance level for BTC if it continues to rally. This is because $120,000 is the upper band of the Traders’ On-chain Realized price – here, the unrealized profit margin sits at 40%. Historical data indicate that this upper band has consistently served as a key resistance during bull markets.

While BTC still faces the possibility of a continued rally, the asset had fallen below $104,000 at the time of writing. Data from CoinMarketCap showed BTC was down 2% in 24 hours, tumbling from the $105,000 level.

Meanwhile, analysts have revealed that BTC investors have been realizing some profits following the recent price surge, but at moderate levels compared to past markets. Hence, there is no evidence to suggest that the bull cycle is ending; in fact, market conditions indicate continued strength in bitcoin’s upward trajectory.