Is Bitcoin Overheating at $111K? Analysts Weigh In

Bitcoin Hits $111K: Market Overheated or Just Getting Started?

Bitcoin surged to a new all-time high of $111,970 on May 22, before pulling back to $110,700, raising questions among traders about whether the market is becoming overheated.

Despite the correction, analysts are sending mixed signals — some point to technical indicators suggesting exhaustion, while others say on-chain metrics still show a healthy uptrend.

Bitcoin funding rates and STH SOPR. Source: CryptoQuant

Bitcoin “Still Not Overheated,” Says CryptoQuant Analyst

According to CryptoQuant analyst Crypto Dan, Bitcoin’s rally is not yet showing signs of overheating. He points to moderate funding rates and limited short-term profit-taking as evidence that the uptrend could continue.

“Overheating indicators such as the funding rate and short-term capital inflow remain low compared to previous peaks,” he noted in a May 22 report.

While funding rates have risen slightly, they remain well below levels seen during past bull market peaks. A spike in funding rates can indicate speculative excess and raise concerns about volatility and liquidations. For now, though, the market appears balanced.

Bitcoin’s MVRV Z-score. Source: Glassnode

The Short-Term Holder Spent Output Profit Ratio (STH SOPR), which tracks profit-taking activity among recent buyers, is currently around 1.02, implying most holders are not cashing out despite being in profit.

“Whales are holding tight, and we haven’t seen the same profit-taking we saw in March or November 2024,” Dan added.

MVRV Z-Score Suggests Room to Run

Another metric, the MVRV Z-score, which compares Bitcoin’s market cap to its realized value, shows the market is far from overheated. Currently at 2.8, the score is still below the red zone — historically associated with market tops.

“All previous bull markets ended when the MVRV Z-score hit the red zone. We’re not there yet,” analysts noted.

Crypto market RSI heatmap. Source: CoinGlass

RSI and Sentiment Show Short-Term Exhaustion

From a technical standpoint, Bitcoin’s Relative Strength Index (RSI) is flashing warning signs. On the daily timeframe, RSI is at 75, indicating overbought conditions. The 12-hour RSI is also high at 70, while the weekly and 4-hour charts show RSI at 68 and 66, respectively — still elevated, but less extreme.

Meanwhile, the Crypto Fear & Greed Index sits at 78, signaling “extreme greed,” a level that historically precedes corrections.

The last time sentiment hit similar levels was during the December 2024 rally, when Bitcoin topped at around $108,000 before falling to $74,000 by March.

Crypto Fear and Fear Index chart. Source: Alternative.me

Final Take: Healthy Rally with Caution Ahead

While technical indicators suggest the market may be nearing a short-term cooling phase, on-chain data supports a continued uptrend. With ETF demand rising and global macro tensions easing, Bitcoin may have more room to grow — but traders should stay vigilant.