Massive inflows into accumulation addresses signal strong demand for Bitcoin, but indicators warn of overheating with prices reaching $60,000. Miners are overpaid, and traders' profit margins are elevated, posing risks.
Bitcoin has witnessed substantial inflows into accumulation addresses, indicating a surge in demand as noted by on-chain analyst Julio Moreno. Nevertheless, certain metrics also point towards the cryptocurrency market entering an excessively heated phase.
Accumulation addresses serve as repositories that exclusively receive BTC without any outgoing transactions, reflecting the behavior of investors who are acquiring and holding onto Bitcoin. Moreno highlights that the influx of funds into these accumulation addresses has soared to unprecedented levels, underscoring a robust appetite for Bitcoin.
However, Moreno has issued a cautionary note, emphasizing that the rapid escalation in prices has triggered indications suggesting an overheated state in the bull market. Notably, the Bitcoin bull-bear market cycle indicator has raised alarms, signaling an overheated bull phase coinciding with the surge to $60,000.
Furthermore, Bitcoin miners are potentially receiving excessive compensation at prevailing price levels, as indicated by the Bitcoin mining hash ribbon. While miners earn block rewards and transaction fees for safeguarding the network, surging Bitcoin prices translate into exceptionally high returns. The hash ribbon indicating an 'overheated' status implies that miner earnings are at an unsustainable peak, possibly leading to increased selling pressure.
Additionally, traders are witnessing remarkably elevated unrealized profit margins, standing at 45%, suggesting the possibility of profit-taking if the upward trajectory of prices halts.