Bitcoin is a rally away from new highs, but the excess euphoric bulls signal ‘overheating’ market

Key takeaways:

• The price of bitcoin maintains its bullish momentum, but an indicator of emotion suggests that the market may be overheating.

• Data featured Bitcoin entrepreneurs who earn revenue and a lopsided angle market towards Longs.

• Analysts warn of a potential short-term correction, especially if gold is weakened or seasonal trends are playing.

Optimism returns to crypto markets, and many traders believe in bitcoin (Btc) The price is on the path to new all-time highs. In just a month, Bitcoin climbed 39%, briefly crossed the $ 105,000 mark. According to Glass node Analysts, “There are signs of modified market strength, and the market is trading within a revenue regime.”

However, not everyone is convinced that the rally will continue to be unstoppable. Some investors are already taking revenue, pushing the realized Bitcoin cover to a full time of $ 889 billion. Although more income is expected in $ 106,000 level.

Historically, the sentiment in the euphoric market often leads to periods of integration – or even sharp correction. That risk can grow, especially as gold, that the act of bitcoin prices are closely -mmirrored in recent months, showing signs of fatigue and may go for a correction itself.

Most investors return to income

The recent Bitcoin rally has returned more than 3 million BTCs to a profitable state, according to Glassnode. This change has reigned capital flows, which exceeds $ 1 billion per day, suggesting a strong interest demand and a market that is willing to absorb the sale pressure. Although most short -term underwater holders since December 2024 peaks have seen their portfolios turn green.

This relief, both financial and psychological, is already translated into spending behavior. The difference of the net between the volume of transfer of short -term income compared to a loss has sank strongly to +20% -a well -known return from -20% seen in the capitulation stage by the end of April.

The confidence in the institution’s investment has been rebounding again. In the past three weeks, more than $ 5.7 billion has flowed into bitcoin ETFs, according to Coinglass. The total assets under the management held within the US spot ETF have risen to more than 1.26 million BTC, a new full time.

Are crypto entrepreneurs euphoric today?

At very momentum, it is easy to imagine a moonshot. But the same momentum can cause caution. The open interest of BTC up to $ 68 billion, close to all times high, indicating a heavy positioned market. In these conditions, even a small catalyst can spark an outsized move – up to.

André Dragosch, head of research on Bitwise Asset Management, has warned that Bitcoin can get a little of his own. She is Na -Post Bitwise’s in-house cryptoasset sentiment index, which has reached the highest level since November 2024. The index, which includes 15 sub-adventure covers sentiments, flows, onchain data, and derivatives (such as the ongoing funding rate and ratio of the call volume), now it shows too much warming.

In comments to Cointelegraph, Dragosch said,

“The latest readings suggest that the sentiment on the market has become extremely hot and that positioning will appear to be one side in the long side. There is a possibility of signaling an increase in risk for a temporary pull-back on bitcoin price, and the current rally can rest.”

However, DRAMOTCH remains “structurally constructive” until the end of 2025, citing the BTC’s ongoing accumulation of corporations and ETPs, which continues to reduce Bitcoin on-exchange balances.

Related: The Governor of Arizona kills two crypto bills, falling into bitcoin ATMs

PATENTIAL CRYPTO MARKET HEADWINDS

Many risks can challenge Bitcoin in the short term.

For Bitwise Chief Investment Officer Matt Hougan, the modified uncertainty in regulations is a leading concern, especially after the The Senate has stopped stablecoin law Last week.

More broadly transfers to market behavior can also play. Since March 2025, Bitcoin has shown a stronger touch with gold than equality. That shift adheres to dramatic changes in US policy, which appears to guide capital towards political neutral ownership: both Bitcoin and gold rose 22% (the latter since corrected with a 13% gain). At the same time, the S&P 500 and NASDAQ-100 were just jailed back to earlier losses.

The difference -this variety continues in shorter time frames. Since May 12, US major indexes have gained 3% to 4% of positive US-China trade relations, but bitcoin is slightly blooming. Meanwhile, gold initiates the printing of lower highs – a potential early signal of a downtrend, as mentioned By analyst Michael Van de Poppe. If gold enters a corrective phase, Bitcoin can follow the suit.

The time -time can also play. The adage “Sell in May and leave” has some historical backbacks. As Analyst Daan Crypto Trades mentionedMay is usually a green month for Bitcoin (averaging over 8%), while June and September are often the worst months to perform. As he puts it on,

“Pana -time is never something to just base your decisions, but it can work well. Many investors watch the same thing after all.”

If this rally has more room to run – or because of a breath – it can be tested as soon as possible.

This article does not contain investment advice or recommendations. Every transfer of investment and trading involves risk, and readers should conduct their own research when deciding.