Bitcoin's recent surge has hit a critical juncture, with CryptoQuant Research Head Julio Moreno sounding the alarm on mounting correction risks. Moreno's warnings are grounded in a meticulous analysis of technical and on-chain indicators, painting a picture of heightened vulnerability in the market.
Moreno's concerns stem from Bitcoin's ascent towards the 200-day moving average, a pivotal resistance level. The parallel with March 2022 is striking: Bitcoin rallied 43% before hitting this very same resistance zone, followed by a downward trend. This historical precedent casts a shadow of doubt over the current rally's sustainability.
A key factor in Moreno's analysis is the surge in unrealized profits among traders. As of May 5, these profits reached a staggering 17.7%, the highest since June 2025. This figure is ominous, as traders with substantial paper gains are more inclined to sell into strength, especially when approaching a widely watched resistance level.
The Coinbase Bitcoin Price Premium, a crucial barometer of US investor demand, has turned negative in late April and remained so as Bitcoin approached $80,000. This negative premium suggests decelerating US institutional demand, a critical weakness in the current market dynamics.
While spot demand has improved, it remains negative, indicating that the market is not yet strong enough to confirm sustained spot accumulation. The growth in demand appears to be concentrated in speculative perpetual futures positioning rather than spot buying.
CryptoQuant identifies the main on-chain support level near $70,000, represented by the Traders' On-chain Realized Price. This level has historically acted as a resistance-turned-support band in bear markets, reflecting the average cost basis of short-term traders.
In conclusion, Moreno's analysis paints a picture of a market teetering on the edge, vulnerable to a correction. The historical parallels and technical indicators suggest that the current rally may be running out of steam, and investors should proceed with caution.
