Bitcoin recently surpassed $111,970 on May 22nd, marking a new all-time high for the cryptocurrency, but it later retraced to around $110,700. Analysts are debating whether this price surge indicates an ‘overheated’ market or if it is part of a healthy correction. Several indicators suggest Bitcoin remains in a strong upward phase, but some cautionary signals have emerged.
While the price reached new highs, metrics like funding rates and short-term holder (STH) SOPR are hinting at a more balanced market. CryptoQuant analyst Crypto Dan highlights that even though funding rates have seen a spike, these bets remain significantly smaller compared to previous peaks, suggesting there’s no signs of ‘futures market overheating.’
Despite the recent price surge, profit-taking remains limited by analysts. A low percentage of STHs are taking profits, indicating a cautious approach.
However, some concerns remain. Bitcoin’s MVRV Z-score has surged in recent weeks, and while this historically precedes bull runs, it’s not yet entered the ‘overvalued’ zone. Furthermore, the RSI is currently showing signs of overbought conditions, though experts note that these alone don’t guarantee a trend reversal.
Despite warnings from some analysts, Bitcoin’s market dynamics remain complex and influenced by factors such as increasing ETF demand, easing trade tensions, and investor sentiment. This article does not contain investment advice or recommendations, but it highlights key points in the ongoing discussion around Bitcoin’s price movement.