Bitcoin Fails to Break New Highs: Signs of a Market Turning Point

Currently, Bitcoin is just one step away from its all-time high of $126,080 but is being forced to trade around the $87,580 level. The market, once considered to be on the verge of a “sure breakout to new highs,” is facing an unexpected setback. In this situation, what judgments are market participants making?

Despite favorable factors such as regulatory tailwinds, institutional investor entry, and inflows into spot ETFs, Bitcoin’s new high breakout is stalling. Behind this lies subtle changes in market structure and cautious attitudes among large investors.

Traders View the Difficulty of Challenging New Highs

From the perspective of multiple market analysts, the essence of the failed attempt to break new highs is “insufficient preparation.”

Analysis of position (open interest) data shows that while prices are trying to break new highs, the total holdings across the network are still about $2.9 billion below the all-time high. In other words, the market is price-driven, which is considered a healthy upward pattern. Conversely, if positions expand ahead of price and then prices follow, it suggests an excessive FOMO (fear of missing out) market, indicating a more dangerous phase.

However, in reality, this technical health does not necessarily guarantee a successful new high breakout. Instead, market participants are raising concerns about the “sustainability of buying support.”

CoinKarma’s indicator “LIQ,” which shows the balance between sell and buy orders on the order book, indicated red (strong sell pressure) when Bitcoin reached the $106,000 range. Since then, even as prices rose, the red signals have decreased, indicating that the selling pressure caused by upward movement is easing. However, this phenomenon only reflects temporary buying support and does not guarantee continuous energy supply.

The Meaning of Decreased Chip Concentration: How Long Will Institutional Buying Support Last?

On-chain data analysis reveals a more complex market structure.

Bitcoin’s chip concentration has decreased from 15.5% in early May 2025 to 8.2%. This suggests that Bitcoin is gradually dispersing into new high zones. If the concentration continues to decline with rising prices, further upside potential is considered. However, since mid-May, the concentration curve stopped declining near 8.2% and showed signs of turning upward again.

This movement introduces uncertainty into the market direction. The phenomenon of the concentration curve halting before fully declining, similar to the pattern seen on November 3, 2024, was followed by significant volatility. This indicates that after a failed new high breakout, the market is likely to choose a new direction.

Meanwhile, according to CryptoQuant data, the 30-day simple moving average (SMA) of the UTXO profit/loss ratio remains at 99, showing no signs of overheating. When this indicator exceeds 200, it signals that the market has entered an “overheated” stage, but currently, it has not reached that level. This suggests that the failed new high breakout is not due to excessive market enthusiasm but may instead reflect the “limits of buying support.”

No Signs of Market Overheating, but Concerns Are Growing

MatrixPort’s analysis highlights that the current Bitcoin rally is progressing with low funding rates. This suggests that spot purchases, rather than leveraged contracts, are leading the market, reducing the risk of a sharp correction. However, an important question arises: who are the “limit buyers”?

Currently, large Bitcoin buyers are limited to institutional investors like Strategy and Metaplanet. If the buying pace of these major purchasers slows down, the market could quickly be exposed to profit-taking selling. Looking at long-term holder data, Bitcoin holdings continue into early 2025, indicating the cycle is not over yet. However, predicting when long-term holders will start selling is difficult, and identifying that turning point is the biggest challenge for market participants.

What the Failed High Breakout Indicates for the Next Phase

The phenomenon of a failed new high breakout may not be just a temporary correction but could signal a structural shift in the market. As long as institutional-led buying support continues, Bitcoin may have room for further gains. However, this rally is expected to be more gradual and strategic compared to the retail-driven speculative markets of 2017 and 2021.

Future focus points include at which level the chip concentration stabilizes and how much volatility expands during concentration increases. These indicators will likely be key in determining the market’s next direction.