Copper: Bitcoin may peak in the short term, on-chain indicators show signs of market overheating

The digital asset custodian Copper suggests that the latest price trend of Bitcoin indicates it may peak in the short term, with on-chain indicators showing signs of market overheating. As Bitcoin hovers above the $66,000 mark, Copper's research analysts have examined key indicators, including those reflecting address profitability, to assess market sentiment ahead of the upcoming U.S. election.

This week's Copper Opening Bell report analysis of Bitcoin on-chain data shows that based on the last moved price of Bitcoin, 98% of wallet addresses are now profitable. Historically speaking, when this ratio rises significantly (recently at 75%), investors tend to lock in profits and thus selling pressure often occurs. According to Copper analysts, this could suggest that Bitcoin is nearing a short-term peak.

Copper analysts stated: "When there is significant volatility, patterns emerge; when we see a fairly large proportion of addresses turning profitable it usually leads to selling pressure which might indicate that the market is experiencing a temporary top before US elections." The analyst added: "The market has reacted to ETF inflows over the past seven days with prices breaking through $69k for first time since July. However something seems off about growth; earlier this year there was substantial daily growth in ETFs but recently such phenomenon hasn't been observed in markets."