Bitcoin Faces Multiple Sell Signals: Is a Market Cooldown on the Horizon?

Bitcoin Faces Multiple Sell Signals: Is a Market Cooldown on the Horizon?
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Bitcoin’s recent price action has caught the attention of both casual investors and seasoned traders. After reaching a local high of $110,000, BTC has slipped to around $103,700, marking a 3.88% decline over the past week. This pullback has sparked discussions about whether the current bull run is losing steam and if a broader market correction is on the way.

Key On-Chain Metrics Signal Caution

Several on-chain indicators are now flashing warning signs. According to CryptoQuant analyst Axel Adler, Bitcoin’s Net UTXO Supply Ratio has triggered four consecutive sell signals. This metric, which tracks the movement of unspent transaction outputs, suggests that the market is overheated. When the UTXO Ratio drops, it often means that more investors are taking profits, and demand is starting to lag behind supply.

At the same time, Bitcoin’s Net Unrealized Profit (NUP) has fallen to 0.553, its lowest level in weeks. This indicates that most holders are sitting on smaller gains than before, reducing their incentive to hold and increasing the likelihood of further profit-taking. Notably, those who bought BTC between $104,000 and $112,000 are now in the red, which could trigger panic selling if prices continue to fall.

Support Levels to Watch

The current market setup suggests that Bitcoin could revisit the $101,488 support level. If this level fails to hold, the next key support is near $98,890, with a deeper risk zone around $92,000. These levels are critical for traders and investors to monitor, as a break below $100,000 could accelerate selling pressure.

Market May Need a Reset

Adler’s analysis points to the need for a market reset. This could mean Bitcoin trades sideways between $95,000 and $105,000 until the Net UTXO Supply Ratio stabilizes around 0.85–0.9, signaling a cooling-off period. Alternatively, a sharper drop to $92,000 might be necessary to fully ease the current overheated conditions.

Selling Pressure Remains High

Adding to the cautious outlook, the Taker Buy-Sell Ratio—a measure of buying versus selling activity—has stayed negative for four consecutive days. This persistent selling pressure increases the risk of further declines, especially if key support levels are breached.

What’s Next for Bitcoin?

While the long-term outlook for Bitcoin remains strong, the current data suggests a period of consolidation or even a deeper correction may be ahead. Investors should keep an eye on on-chain metrics and support levels, and consider risk management strategies as the market navigates this cooling phase.

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