Bitcoin has increased by 7% in the past two weeks, showing strong signs of growth despite expectations that the U.S. Federal Reserve (Fed) will keep interest rates unchanged at the upcoming meeting on July 30. However, some indicators suggest that the market may be entering an overheated zone.

Is the Bitcoin Market Entering an Overheated Phase?

According to a recent post by CryptoQuant Quicktake contributor burakkesmeci, the Bitcoin Network Value to Transaction (NVT) Golden Cross is on the rise. Importantly, this upward movement is beginning to signal signs of an overheated market.

For those unfamiliar, the Bitcoin NVT Golden Cross is a technical indicator that compares the short-term and long-term moving averages of the NVT ratio to identify potential market peaks or troughs. When the short-term NVT crosses above the long-term average, it often signals that Bitcoin is overvalued and may face a short-term correction.

Notably, this indicator has successfully predicted three local peaks in 2025 so far. The first peak occurred on February 5, when the NVT Golden Cross reached 2.68 while BTC was trading at $97,600, followed by a correction of 23.65%.

On March 24, the indicator peaked at 2.87 with BTC around $87,500, leading to the next correction of 16.06%. Most recently – on June 16 – the indicator rose to 2.21 with BTC trading at $106,800, followed by a price drop of 9.87%.

Currently, the NVT Golden Cross is at 1.98. While it has not yet surpassed the critical threshold of 2.2, its upward trajectory suggests that the market may be overheated. CryptoQuant analysts explain:

Breaking past the previous high is quite optimistic and suggests that momentum is forming. If this indicator surpasses 2.2 again, it could hint at a local peak. But don't be quick to exit – historically, this indicator has maintained above 2.2 for several days.

In summary, burakkesmeci notes that while surpassing the 2.2 level may indicate Bitcoin is heating up in the short term, it could also signal the return of bullish momentum in the medium term. However, opinions on BTC's short-term price trajectory remain largely divided.

Analysts Divided on BTC Price Action

The NVT Golden Cross suggests that BTC may still have room to rise before reaching a potential local peak. However, some analysts predict a short-term pullback before Bitcoin reaches new highs.

For example, renowned cryptocurrency analyst Chistian Chifoi described the current BTC price action as a 'trap setup,' warning that prices might trap buyers before potentially skyrocketing to a new all-time high (ATH) of $160,000.

Meanwhile, chain analysis firm Glassnode predicts a short-term peak for BTC at $117,000. At the time of the press report, BTC was trading at $108,204, down 0.1% in the past 24 hours.