The cryptocurrency market is currently experiencing a short-term overheating, marked by a decline in momentum. This phase is significantly less intense compared to previous correction periods.
Short-Term Overheating
According to on-chain data from CryptoQuant, the market is moving out of a brief overheating stage. The analysis focuses on Bitcoin held for 1 to 7 days, which tends to spike during speculative phases.
The recent increase in the percentage of short-term holders suggests rapid trading activity. However, the rise in this metric was not as sharp as seen before in prior corrections between March–October 2024 and January–April 2025.
Comparison with Previous Corrections
CryptoQuant illustrated past overheating periods and current trends to highlight the difference. Historically, stronger overheating led to more extensive corrections. In contrast, the recent price movement has been relatively modest.
Prospects for the Second Half of 2025
Despite the current cooling phase, long-term observers are monitoring potential resurgence. CryptoQuant's analysis implies that the current reset may lay the groundwork for a potential rebound in the second half of the year.
Market participants are likely preparing for the next directional move as the overheating period wanes. Given past cycles, this readjustment may act as a foundation for future upside as 2025 progresses.
Overall, the cryptocurrency market is undergoing a phase of short-term overheating, which is characterized by less intensity compared to previous cycles, indicating a potentially more stable correction process.
