Bitcoin breaks through the 120,000 mark but faces resistance, on-chain indicators warn of short-term overheating risks | BTC price prediction

Bitcoin's market is currently consolidating below historical highs, now reported above $119,000. Despite a slight weekly rise of 0.3% and an unchanged long-term bullish trend, on-chain data analysts point out that key indicators (bull-bear cycle indicators) are approaching the "overheated bull run" zone, warning of short-term pullback risks. Meanwhile, this round of rise is mainly driven by institutional funds and ETF demand, with retail interest being low, and search popularity far from previous highs, which may suggest that the bull run has not yet entered its final frenzy stage.

Bitcoin price is consolidating at a high level, on-chain indicators are showing yellow lights

Bitcoin prices continue to trade below the historical high set earlier this month, currently hovering above the $119,000 mark. The price fluctuations over the past week recorded only a mild rise of 0.3%, but some analysts believe the market may be approaching a turning point.

Bull and bear cycle indicators approach overbought area, short-term pullback risk increases

This sideways consolidation has not weakened the broader bullish outlook, but on-chain indicators now suggest the need for vigilance. CryptoQuant QuickTake writer Arab Chain points out that Bitcoin's current market structure may have potential overheating risks.

Arab Chain recently emphasized the behavior of the Bull and Bear Market Cycle Indicator, which is currently in a zone typically associated with a strong bullish trend. However, its proximity to the so-called "overheated bull" range has raised concerns in the market about a possible pullback. Historical patterns of this indicator suggest that this zone often foreshadows a cooling period for prices, prompting investors to consider profit-taking strategies.

Arab Chain points out that although the market structure is bullish, the advance of indicators into the overbought zone may prompt speculators to close their positions. "Approaching the overbought zone indicates that now is not the best time to make large purchases," the analyst explained. This view reflects a broader market sentiment that participants may choose to wait on the sidelines for a more favorable re-entry opportunity after a pullback.

In addition, although the moving averages from 30 days to 365 days still support the continuation of the bullish trend, they may also suggest that a short-term top is forming, unless new market catalysts emerge to break this situation.

Institutional demand drives this round of rise, retail interest remains subdued

Supporting this view is another analyst from CryptoQuant, Burak Kesmeci, who emphasizes that institutional activity is a key force driving the current cycle. Kesmeci explains that since the beginning of 2023, retail investors have reduced their Bitcoin exposure, while large investors have been continuously increasing their holdings since early 2024. "This time, the source of Bitcoin's rise is not retail investors—big players are at the wheel," he wrote. This accumulation behavior driven by high-volume wallets (likely related to institutions or Bitcoin ETF) highlights a difference from previous cycles that were dominated by retail investors.

Kesmeci further pointed out that Google Trends data shows that the search interest for "Bitcoin" is still sluggish compared to the previous bull run peak. The lack of widespread retail enthusiasm sharply contrasts with the high public participation during the Bitcoin surge in 2021.

According to Kesmeci, the current calm phase may indicate that retail investors have not entered the market on a large scale yet—this phase has historically marked the final sprint of a bull run. "The masses have not yet awakened," he noted, adding that "smart money is currently on stage—while most people are still watching from the sidelines."

Conclusion: Bitcoin prices continue to fluctuate near historical highs, with on-chain indicators signaling a short-term overheating. Investors need to be vigilant about pullback risks. Currently, the market is strongly supported by institutional funds and ETF demand, creating a unique driving structure, while the lack of interest from retail investors may indicate that this bull run still has potential upside. Closely monitoring changes in key indicators and the emergence of new catalysts will be crucial for grasping the next phase of Bitcoin market trends.