Bitcoin (BTC) price hits a new all-time high of $111,970, retraces to $110,700

Bitcoin hit a new all-time high of $111,970

Key takeaways:

Bitcoin (BTC) hit a new all-time high of $111,970 on May 22.

After a slight retracement, BTC is currently trading at $110,700.

Despite the new highs, analysts at CryptoQuant see mixed signals on market overheating in terms of funding rates and other metrics.

Bitcoin price rose to a new all-time high of $111,970 on May 22, but it pulled back to $110,700 at the time of writing.

After hitting a new all-time high, it is normal to see some retracement as traders take profit and adjust their positions. However, there are mixed signals on whether the price rally is overheated or whether this is a healthy pullback.

Bitcoin is still not ‘overheated’ — analyst

Bitcoin is not showing any signs of being overheated despite hitting new all-time highs this week, with several analysts pointing to fundamentals that suggest Bitcoin could rise further.

“Overheating indicators such as the funding rate and short-term capital inflow remain low compared to previous peaks, and profit-taking by short-term investors is limited,” said CryptoQuant analyst Crypto Dan in a May 22 Quicktake note.

Crypto Dan noted that Bitcoin’s funding rate, an indicator of market over-engagement, shows an increase in long bets. But these bets “remain much smaller compared to previous peaks,” suggesting “futures market overheating is negligible.”

A spike in Bitcoin funding rates can sometimes cause worry among market participants about increased Bitcoin volatility and liquidation risks.

Still, the funding rates are moderately positive, signaling that traders are optimistic about Bitcoin’s price and buyers are willing to pay sellers a fee to keep their positions.

Meanwhile, the short-term holder (STH) Spent Output Profit Ratio (SOPR) metric reveals that despite STHs returning to profit, few have taken profits during the recent rise.

This indicator is currently valued at 1.02%, suggesting that STHs are realizing some profits at much lower rates.

“In March 2024, there was significant profit-taking and a prolonged correction, but currently, profit-taking is much lower than in November 2024,” the analyst explained, adding that despite the price at all-time highs, whales’ profit-taking activity remains relatively subdued.

CryptoQuant’s Crypto Dan expected Bitcoin to continue rising higher, noting:

“Considering the macroeconomic environment, there are no major concerns at present, and Bitcoin is not showing any signs of overheating.”

Bitcoin MVRV Z-score surges

Meanwhile, Bitcoin’s MVRV Z-score value — a metric that compares BTC’s market value to its realized value and adjusts for volatility — has seen a notable surge over the last month.

Historically, all previous Bitcoin bull runs started with a notable surge in MVRV Z-score and ended with the metric entering the red zone to signal that Bitcoin is significantly overvalued.

At 2.8, the MVRV Z-score is still significantly below the red zone, suggesting that the market top is not yet in.

Bitcoin's RSI entering ‘exhaustion’

Bitcoin's relative strength index, or RSI, displays overbought conditions in two out of five timeframes. Bitcoin’s RSI is now at 70 in the 12-hour timeframe and 75 on the daily chart. Other intervals show near-oversold RSI values on the weekly and four-hour timeframes.

Data from TradingView shows BTC’s RSI at 75, 71, 68 and 66 on daily, 12-hour, weekly and four-hour timeframes, respectively.