• Bitcoin has surged past $118,000, yet key market indicators like SOPR and funding rates reveal a balanced and sustainable rally without signs of overheating.

• Short-term holders are holding steady, refraining from significant profit-taking, which supports continued upward momentum in Bitcoin’s price.

• According to COINOTAG sources, the derivatives market shows neutral funding rates despite rising open interest, indicating cautious optimism rather than speculative excess.

Bitcoin’s price rally to $118K remains supported by healthy market metrics like SOPR and funding rates, signaling sustained momentum without overheating.

Bitcoin’s Rally Supported by Low Profit-Taking Among Short-Term Holders

Bitcoin’s recent price surge to nearly $120,000 has not triggered significant profit-taking among short-term holders, a critical factor for the rally’s sustainability. Data from CryptoQuant highlights that holders with less than 155 days of ownership purchased Bitcoin at an average price near $100,000. Despite current gains of approximately 17–18%, these investors have yet to realize substantial profits, as evidenced by the Spent Output Profit Ratio (SOPR) remaining below the threshold that typically signals widespread selling.

This restrained selling behavior reduces downward pressure on Bitcoin’s price, allowing the rally to maintain momentum. The market’s calm sentiment, reflected in SOPR levels, suggests investors are confident in further upside potential rather than rushing to lock in gains prematurely.

Derivatives Market Indicates Controlled Bullish Sentiment

While open interest in Bitcoin futures has increased, signaling greater market participation, funding rates have stayed near neutral levels. This balance implies that traders are not excessively leveraging their positions, which often serves as a warning sign of speculative bubbles or imminent corrections.

Neutral funding rates indicate measured optimism, contrasting with the rapid spikes seen during periods of FOMO-driven buying. This cautious stance among derivatives traders helps mitigate the risk of sharp price reversals, supporting a more stable price trajectory for Bitcoin.

Market Structure Remains Healthy, Allowing Room for Further Gains

Market analysts from COINOTAG note that Bitcoin’s current structure shows no signs of overheating. The combination of stable SOPR readings and moderate funding rates points to a market that is absorbing buying pressure without triggering panic selling or excessive leverage.

This healthy market environment provides a foundation for Bitcoin’s price to continue its ascent. The absence of euphoric behavior among investors and traders suggests that the rally could extend before encountering significant resistance from profit-taking or leveraged liquidations.

Insights from CryptoQuant Reinforce Positive Outlook

CryptoQuant’s recent commentary emphasizes that the Bitcoin market “doesn’t show signs of being overheated with excessive selling from profitable short-term holders.” This observation aligns with the current data trends, reinforcing the notion that Bitcoin’s rally is supported by solid fundamentals rather than speculative excess.

Such insights are valuable for investors seeking to understand the underlying dynamics driving Bitcoin’s price action and assessing the sustainability of its upward trajectory.

Conclusion

Bitcoin’s breakthrough above $118,000 is underpinned by robust market indicators, including restrained profit-taking by short-term holders and neutral funding rates in the derivatives market. These factors collectively suggest a healthy and sustainable rally rather than an overheated bubble. Investors should monitor SOPR and funding rates as key signals to gauge ongoing market sentiment and potential future price movements. For now, the data supports the possibility of continued Bitcoin appreciation with controlled risk.