Bitcoin

Momentum

when

<h2 id="key-points">Key Points</h2> 
<ul> 
 <li>Bitcoin’s price momentum and overbought conditions suggest potential overheating.</li> 
 <li>High SOPR values, overleveraged market, and spiking Funding Rates indicate caution may be warranted.</li> 
</ul>  
<p>Bitcoin has managed to pull itself back into the $98,000 price range, maintaining a positive Funding Rate for weeks on end. </p> 
<p>As Bitcoin [BTC] teases the $100,000 mark, speculations about the sustainability of its current rally are rife. </p> 
<h2 id="bitcoin-s-price-momentum-and-overbought-conditions">Bitcoin’s Price Momentum and Overbought Conditions</h2> 
<p>The daily BTC/USD chart showcases Bitcoin’s steep upward trajectory, with the coin breaking out from consolidation near $65,000 just a few weeks ago. </p> 
<p>The Relative Strength Index (RSI) stood at 78.6, signifying Bitcoin’s presence in the overbought territory. </p> 
<p>In addition, Bollinger Bands depicted the price trading near the upper limit, implying increased volatility. </p> 
<h2 id="bitcoin-sopr-indicates-profit-taking">Bitcoin SOPR Indicates Profit-Taking</h2> 
<p>The Spent Output Profit Ratio (SOPR) chart provides a clearer insight into market behavior. </p> 
<p>SOPR, which gauges whether coins moved on-chain are profitable, has been rising steadily alongside Bitcoin’s price. </p> 
<p>A sudden drop in SOPR could signal increased selling pressure, potentially triggering a broader correction. </p> 
<h2 id="an-overleveraged-market">An Overleveraged Market</h2> 
<p>Another warning sign comes from the Bitcoin Funding Rates chart, which depicted a sharp uptick across major exchanges. </p> 
<p>Funding Rates are positive when long positions dominate the market, and excessively high rates suggest over-leveraging. </p> 
<p>Should a correction occur, overleveraged positions would likely exacerbate the sell-off through liquidations, adding downward pressure. </p> 
<p>While Bitcoin’s rally is undoubtedly historic, the convergence of overbought RSI levels, high SOPR values, and spiking Funding Rates signaled potential overheating. </p> 
<p>A healthy correction could reset the market, paving the way for sustainable growth rather than speculative mania. </p> 
<p>While Bitcoin could continue its upward trajectory, the risks associated with its rapid ascent cannot be ignored. </p>

Monitoring Bitcoin’s Stability as it Approaches $100K: Key Factors to Consider

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CoinEagle.com

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