Bitcoin has yet to reach its peak. But the market is starting to exhibit overbought conditions that could later result in a sizable correction, according to researchers at several firms.
Swissblock’s optimism
Swissblock drew attention to readings of Bitcoin Vector’s Optimal Signal.
Based on @bitcoinvector’s Optimal Signal, each of the last major BTC expansions has lasted 15–30 days.
We are currently on day 12 — with capital also beginning to rotate into $ETH.
This cycle appears incomplete. pic.twitter.com/iFUoaYzNjW
— Swissblock (@swissblock__) July 15, 2025
“Each of the last notable bouts of bitcoin growth lasted from 15 to 30 days. We are currently on day 12, with some capital starting to rotate into Ethereum,” the experts observed.
Moreover, short-term holders’ unrealised profit is significantly below the levels recorded at previous peaks (January and April 2024).
2/ @glassnode’s Short-Term Holder Relative Unrealized Profit remains well below the threshold reached during prior cycle tops (Jan & Apr 2024).
Market participants are not exhibiting signs of excessive profit-taking or euphoria — yet. pic.twitter.com/5kxiaMahKg
— Swissblock (@swissblock__) July 15, 2025
“Market participants are not yet showing broad profit-taking or signs of euphoria,” Swissblock noted.
Willy Woo’s Speculation Index and the metric VWAP Liquidity also indicate that the market is not yet overheated.
3/ Both @woonomic’s Speculation Index 🔴 and VWAP Liquidity 🔵 confirm that the market is not yet overheated.
Neither indicator has reached prior cycle extremes, suggesting ongoing support for higher prices. pic.twitter.com/IInMgJYaFI
— Swissblock (@swissblock__) July 15, 2025
“Both indicators are far from the extremes of past cycles, which suggests further upside potential,” the experts explained.
Glassnode’s observations
Glassnode researchers supplemented Swissblock’s analysis with several metrics that “help determine the current phase of the cycle and explain why caution is warranted in the short term”.
Bitcoin’s recent rise above $122,000 brought the price close to a level one standard deviation above the short-term holders’ cost basis.
The recent rally to $122k has pushed #Bitcoin close to 1 standard deviation above the short-term holder cost basis. If this momentum continues, the next key level is $136k (2 +std), a zone that has historically marked elevated profit-taking and local market peaks. pic.twitter.com/Thl6yetTrY
— glassnode (@glassnode) July 15, 2025
“If such a move continues, the next key marker could be $136,000 (+2 standard deviations). In the past this zone saw active profit-taking and the formation of local peaks,” the experts suggested.
They noted that the new all-time high coincided with the moment when the entire supply of coins held by short-term holders was “in profit”.
The recent push to a new ATH at $122k coincided with 100% of short-term holder supply being in profit. This surpasses the 88% threshold that historically marks the shift from a heated market into an overheated, high-risk euphoric phase. pic.twitter.com/pxDSsVsCvw
— glassnode (@glassnode) July 15, 2025
“This reading exceeded the threshold of 88%, which traditionally signals a transition from a heated market to an overheated, high-risk euphoric phase,” the researchers warned.
As the price rose above $120,000, the share of spent volume in profit by short-term holders (7 EMA) reached 82% — well above the overheated threshold of 62%.
As price surged past $120k, the 7-day EMA of spent volume in profit by short-term holders reached 82%, well above the overheated threshold of 62%. Such spikes often occur multiple times in bull markets, but repeated signals at these levels typically precede local tops and warrant… pic.twitter.com/uRQqQ724MO
— glassnode (@glassnode) July 15, 2025
“Such spikes often accompany bull cycles, but their repetition at these levels frequently signals the approach of local peaks and is a cue for caution,” Glassnode noted.
The ratio of realised profit to realised loss among short-term holders (7 MA) reached 39.8 — well above the typical overheated level.
Similarly, the ratio of realized profit to realized loss by short-term holders (7-day EMA) spiked to 39.8x—well above the statistical boundary of the overheated zone. While extreme, such structures have historically appeared multiple times before a final cycle top is reached. pic.twitter.com/frPWU7Mils
— glassnode (@glassnode) July 15, 2025
“Despite the extremely high reading, similar prints have been recorded on the eve of final peaks in previous cycles,” the analysts stressed.
The recent breakout from the multi-month range occurred after accumulation in the $93,000–$97,000 and $101,000–$109,000 zones, which is evident on the CBD heatmap.
The recent breakout from the multi-month range occurred after dense accumulation zones formed between $93k–$97k and $101k–$109k, as highlighted by the CBD Heatmap. These supply clusters are likely to act as strong support if a market correction unfolds. pic.twitter.com/7KIlCHtE9d
— glassnode (@glassnode) July 15, 2025
These supply clusters are likely to act as strong support in the event of a correction.
In conclusion, Glassnode’s experts said bitcoin has entered an overheated zone. In their view, cycle tops have historically “formed with a delay”, leaving scope for further gains.
“However, risk is increasing, and the market is becoming more sensitive to external shocks. The current correction fits this pattern,” they summed up.
CryptoQuant’s view
The CryptoQuant analyst known as Crypto Dan is confident the market is not yet overheated.
“Unlike in March and December 2024, on-chain metrics are not yet signalling an overheated market,” he wrote.
The absence of overbought conditions “compared with previous short-term peaks” points to the likelihood of a new ATH and a continued rally in the second half of 2025.
“The potential for further upside remains,” Crypto Dan concluded.
Earlier, the CryptoQuant researcher going by Crazzyblock warned of whales preparing to sell and of looming bitcoin volatility.