The cryptocurrency market is showing signs of cooling off after recent overheating, which could impact Bitcoin prices and overall market trends.
Cooling Off the Crypto Market
According to CryptoQuant, the current overheating phase in the cryptocurrency market is less severe and shorter than in past cycles. Data indicates that the proportion of Bitcoin held for 1-7 days serves as an indicator of market activity. This correction differs from previous periods, such as March-October 2024 and January-April 2025, which were accompanied by more intense overheating.
Potential Corrections and Their Consequences
CryptoQuant expects that any near-term price correction will be mild and short-lived. Currently, Bitcoin's price sits at $118,000, prompting long-term holders to begin offloading assets, following past distribution cycles. At the same time, short-term holders are facing shrinking profits.
Outlook and Status of Bitcoin
Despite the temporary market cool-off, Bitcoin Vector reports that Bitcoin is testing a key resistance level. Should a confirmed breakout above $120,500 occur, it will validate the continuation of the upward trend, while $112,500 will serve as critical support. If Bitcoin holds this range, pullbacks may provide buying opportunities.
While regulatory factors and the overall market dynamics might cause short-term price fluctuations, the long-term outlook remains positive, with expected market strength in the second half of 2025.
