Bitcoin is making waves in the financial world after reaching an unprecedented price of $112,000 last week, further fueling a positive outlook across the cryptocurrency space.
However, on-chain analytics from CryptoQuant suggest that buyers may need to exercise caution, as signs of a potential cooling phase could be emerging.
Bull Score Index Indicates Ongoing Bull Market
CryptoQuant reports that Bitcoin remains firmly entrenched in a bullish market. The Bull Score Index, which gauges on-chain transactions, currently registers at 80.
This index historically signals sustained upward momentum for Bitcoin as long as it stays above the 50 threshold. The strong score reflects heightened engagement from both retail and institutional investors, supported by favorable macroeconomic conditions and a rise in global cryptocurrency adoption.
Market optimism is bolstered by significant demand; over the past month, Bitcoin purchases surged by approximately 229,000 BTC. Although this still falls short of the all-time peak of 279,000 BTC recorded in December 2024, the closeness to that figure may suggest the current buying spree could be losing its intensity.
Declining Whale Accumulation Signals Potential Plateau
While investor enthusiasm remains high, early indicators hint that the current rally might be nearing its peak. Bitcoin balances held by whales increased by 2.8% in the last month, a trend that has traditionally signaled an impending slowdown in large-scale investments.
With buying activity approaching thresholds typically associated with market tops, Bitcoin may soon experience a phase of consolidation. According to CryptoQuant, despite the ongoing bull market, the current rate of growth might not be viable without a short-term adjustment.
Profit Margins of Traders Suggest Possible Resistance Ahead
An important metric to keep an eye on is the Trader’s Unrealized Profit Margin, which reached 32% last week. Historical data shows that when this margin hovers near 40% or dips below the 30-day moving average—now at 19%—price momentum tends to wane.
If Bitcoin continues its upward path, the $120,000 mark could emerge as a key resistance level, aligning with the upper band of the On-chain Traders’ Realized Price, a threshold often encountered during earlier bull markets.
Overall, while the market outlook remains positive, CryptoQuant’s data advises cautious observation. As Bitcoin reaches new heights, vigilant investors should closely monitor the metrics, as the upcoming weeks may be crucial in determining whether this upward trend persists or begins to decline.
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