Bitcoin’s Overheating Cools Off – Is a Q3 Rocket Fueled by Institutional FOMO Next?
Bitcoin's parabolic rally shows signs of healthy consolidation—just as Wall Street traders return from their Hamptons vacations. The crypto king's RSI has slipped from 'melt-your-face-off' territory to merely 'warm,' setting the stage for what hedge funds will inevitably call a 'generational buying opportunity.'
Key Signals Flashing Green
On-chain metrics reveal whales accumulating at $58K support—a level that coincidentally matches the entry points for last quarter's ETF inflows. Meanwhile, the derivatives market shows open interest rebuilding without excessive leverage (for once).
The Institutional Catalyst
With BlackRock's BTC holdings now exceeding MicroStrategy's, the 'smart money' narrative gains steam. Never mind that both are still underwater on their 2024 purchases—this is about branding, not profits.
As the Fed's rate-cut theater enters Act III, Bitcoin's proving it doesn't need cheap money to rally—just greater fools with deeper pockets. The coming weeks will test whether this is truly a cycle reset or just another overhyped dead cat bounce in the world's most volatile asset class.
Bitcoin’s Current Overheating Phase Short-Lived
According to a CryptoQuant Quicktake post by contributor Crypto Dan, bitcoin is currently entering a cooling-off period after a short-term overheating phase. The warning signs are most evident in the cohort of BTC held for one day to one week.
Crypto Dan shared the following chart showing that this short-term holding cohort is now recording successively lower spikes, suggesting that overheated market conditions are easing.
The analyst compared the current environment to previous overheating phases seen between March-October 2024 and January-April 2025. In both instances, the overheating lasted longer and was more intense (shown in red boxes).
In contrast, the current overheating conditions (shown in yellow box) show shorter extent and duration compared to the aforementioned two instances. The analyst added:
Also, since the recent price increase was relatively modest, we may see a milder and shorter correction in the short term. However, it’s important to remain patient and look forward to a potential uptrend in the second half of 2025.
The increase in BTC’s price during the latest rally saw the digital asset surge from around $108,000 on July 1 to a new all-time high (ATH) of $123,128 on July 13, before stabilizing around the $117,500 mark at the time of writing.
Is BTC Preparing For Its Next Big Move?
As Bitcoin consolidates, several analysts suggest the top cryptocurrency may be gearing up for a major move – likely to the upside. Veteran crypto analyst Titan of Crypto noted that Bitcoin is currently “in a pressure cooker.”
Titan of crypto shared the following chart, highlighting that Bollinger Bands are tightening while volatility is shrinking. At the same time, the Relative Strength Index (RSI) is compressing – often a precursor to a breakout.
Fellow analyst Ali Martinez added that BTC’s next top could reach $149,679, based on the Cumulative Value Days Destroyed (CVD) metric. For context, the CVD metric measures whether buyers or sellers are dominating trading volume over time.
That said, some warning signs linger. Recently, bitcoin exchange reserves reached a one-month high, suggesting that some holders may be preparing to sell – potentially putting pressure on the current bullish trend. At press time, BTC trades at $117,546, down 0.4% in the past 24 hours.
