🚨 Bitcoin Nears Overheated Zone – Why Retail Investors Are Still on the Sidelines

Bitcoin's rally is flashing warning signs as it edges into overbought territory—yet Main Street still isn't biting. Here's why the smart money's watching the disconnect.

The Institutional Heat Is On

Whales and algos keep pushing BTC toward parabolic highs while retail wallets gather dust. Classic case of 'institutional FOMO meets retail PTSD.'

Liquidity Mirage?

Thin order books below $60k suggest this run's being propped up by leveraged derivatives rather than organic demand. Cue the usual suspects: hedge funds front-running the halving narrative.

Wake-Up Call Coming

When taxi drivers start giving BTC price targets again—that's when you know we've peaked. For now? Enjoy the quiet before the storm of normie capital chasing the next ATH.

Bonus jab: Nothing brings out financial geniuses like a 10% pullback in an asset that's up 300% YTD.

Bitcoin Bullish Trend Persists, but Signs Point to Caution

In a recent post, the analyst highlighted the behavior of the Bull and Bear Market Cycle Indicator, which now sits in a zone typically associated with strong bullish trends.

However, its proximity to the so-called “overheated bull” range has raised concerns about a possible correction on the horizon. The indicator’s historical pattern suggests this zone often precedes a price cooldown, leading investors to consider profit-taking strategies.

Arab Chain noted that despite the bullish structure, the indicator’s advance toward overheated territory could prompt speculators to close positions. “The proximity of overheated zones suggests that this is not the right time for a major purchase,” the analyst explained.

The insight reflects the broader sentiment that market participants may opt for a wait-and-see approach, anticipating a more favorable re-entry after a correction.

Additionally, while the 30-day to 365-day moving averages still support a continued uptrend, they may also signal that a short-term top is forming unless disrupted by new market catalysts.

Retail Interest Remains Muted as Institutional Demand Grows

Supporting this view, another CryptoQuant analyst, Burak Kesmeci, emphasized the role of institutional activity in driving the current cycle. Kesmeci explained that retail investors have reduced their exposure to Bitcoin since early 2023, while large investors have increased their holdings, particularly from early 2024 onward.

“This time, the source of the bitcoin rally is not retail — the big players are in the driver’s seat,” he wrote. This accumulation by high-volume wallets, likely linked to institutions or ETFs, highlights a shift from previous cycles dominated by retail behavior.

Kesmeci further pointed to Google Trends data showing that search interest in “Bitcoin” remains subdued compared to previous bull runs. The absence of widespread retail excitement contrasts with the intense public engagement seen during Bitcoin’s surge in 2021.

According to Kesmeci, the quiet phase may indicate that retail has not yet entered the market en masse — a stage that historically signals the final leg of a bull cycle. “The crowd has not awakened yet,” he noted, adding that “smart money is currently on stage — and most people are still watching from the sidelines.”

Featured image created with DALL-E, Chart from TradingView