Bitcoin's Profit Signals Flash Green – But How Long Before the Market Overheats?

May 22, 2025 | By Crypto King Trading,

Bitcoin just surged past the $BTC

$BTC 108,000 mark—briefly—but what’s more important than price is what’s happening under the hood. According to the latest UTXO Profit/Loss Ratio data, BTC is still operating well below historical danger zones—a signal that the bull run may be far from over.

Since early April, Bitcoin has rallied over 40%, driven by growing institutional demand and retail FOMO. Yet with BTC trading just below its all-time high, the big question remains: is this the final sprint before a correction—or the calm before a breakout?

Behind the Rally: What the UTXO Ratio Is Telling Us

Top analyst Axel Adler highlights a critical metric: the 30-day Simple Moving Average (SMA) of the UTXO Profit/Loss Ratio. Historically, when this figure crosses above 200, the market enters a "hot zone"—a warning sign of potential overheating. As of now, the ratio sits at 99.

Translation?

There’s still room to run before the market becomes overly euphoric. That could mean Bitcoin is gearing up for a potential explosive move—but there’s also a risk of sudden rejection if momentum fades.

Macro Outlook: Bulls in Charge, But Pressure Is Building

Bitcoin is currently consolidating around $106,000, after a quick rejection from $108,035 earlier today. Despite the pullback, BTC continues to print higher highs and higher lows—classic bullish structure.

Support at $103,600 remains strong. Resistance? The psychological $109,000 zone. A clean break above that could open the door to price discovery and trigger a powerful wave of momentum buying.

But if BTC fails to hold above $103,600, or worse, dips below the $100,000 psychological barrier, expect a deeper correction. The market remains fragile—any disruption in sentiment could cause sharp volatility.

Market Sentiment: Fuel Running Low or Just Gearing Up?

Adler warns that the "easy fuel" behind this rally—mainly short squeezes and momentum buying—may be drying up. From here, bigger catalysts may be needed: ETF inflows, macro surprises, or a fundamental shift in demand.

Still, Bitcoin’s current profit/loss dynamics suggest we haven’t reached euphoria. Not yet. And that’s exactly when markets tend to surprise.

Key Levels to Watch This Week:

Support: $103,600

Resistance: $109,000

SMA 200: $93,186

EMA 200: $88,855

If Bitcoin breaks above $109K with volume, brace for a breakout. If not, prepare for turbulence. Either way, this is a make-or-break moment for the king of crypto.

Chart Source: TradingView | Data Source: Axel Adler via X

Disclaimer: This content is for educational purposes and not financial advice.

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