Bitcoin Faces Consolidation Risk, Analysts Caution

Bitcoin (BTC) has entered a critical “pivot zone” where its recent upside momentum appears to be stalling. On‐chain veteran Willy Woo warns that without renewed spot buying this week, BTC could slide into a prolonged consolidation phase. From an April 7 low of $75,000 to a May 22 peak just shy of $112,000, Bitcoin’s parabolic run is now showing signs of exhaustion on multiple technical and on‐chain indicators.

Short‐Term Models Signal Critical Juncture

In a May 28 post on X, Woo highlighted that the Bitcoin Spent Output Profit Ratio (SOPR)—which measures realized profit by comparing the selling price to the original purchase price—has rolled over. “Late‐comer speculators are piling into long positions, while profit‐takers stand ready to dump,” he wrote. His short‐term models now show a downtrend in risk, but only if spot demand can reassert itself above the $110,800 pressure zone.

“This week’s spot buying will strongly influence the next 1–2 months of price action. We are in a pivot zone.”

Woo adds that on longer time frames, “buy‐side liquidity is dominating,” setting up a potential resumption of the uptrend. However, a breakdown below $108,000 could trigger stop‐loss cascades and shift market structure to a bearish bias.

Technical Indicators Signal Mixed Momentum

• Relative Strength Index (RSI): Currently near 58 on the daily chart, the RSI indicates neutral momentum, with room to run but also vulnerability to a reversal.
• Moving Average Convergence Divergence (MACD): The MACD histogram is contracting, signaling weakening bullish momentum and a potential bearish crossover in the coming sessions.
• Volume‐Weighted Average Price (VWAP): Price is oscillating around the daily VWAP, reflecting market indecision as bulls and bears battle around key inflection points.

On‐Chain Metrics: Supply and Demand Dynamics

1. SOPR Trend: SOPR values dipping below 1.0 indicate that coins are being sold at a loss, a classic sign of distribution phases.
2. MVRV Z‐Score: At 3.2, the Market Value to Realized Value Z‐score remains elevated, suggesting realized gains are historically high and may precede pullbacks.
3. Active Addresses: Daily active addresses have flattened near 1.1 million, pointing to plateauing user engagement.
4. Coin Days Destroyed: A rising trend in destroyed days signals long‐term holders moving coins, often a precursor to profit‐taking.

Derivatives and Futures Market Overview

Futures open interest on CME Group stands around $15 billion, up 12% since mid‐May. Funding rates on major perpetual swaps have turned mildly negative (-0.005% per 8 hours), indicating short sellers are paying for leverage—a typical divergence when price rallies lose steam. Additionally, options skew has shifted slightly bearish, with 25-delta put/call skew trading above 6%, highlighting elevated demand for protective puts.

Macro and Regulatory Landscape

Recent U.S. consumer sentiment data rebounded to a six‐month high, potentially boosting risk appetite. Meanwhile, the Federal Reserve’s dovish comments on interest rates and Europe’s MiCA framework—set to standardize crypto regulation—lend medium‐term support. Spot Bitcoin ETF flows through BlackRock and Fidelity have netted $1.2 billion in April, underscoring steady institutional demand despite price chop.

Expert Price Forecasts and Market Sentiment

At the Bitcoin 2025 conference in Las Vegas, Donald Trump Jr. and Eric Trump reiterated bullish calls that BTC could surpass $170,000 by end-2026. Bitcoin pioneer Adam Back remains even more ambitious, forecasting a $1 million price target within five years based on accelerating global adoption and monetary debasement concerns.

Risk Management and Strategic Considerations

Traders are advised to monitor the $108,000–$110,800 range as a make-or-break zone. A successful hold above $110,800 on high volume could reignite momentum toward $115,000 and beyond. Conversely, a close below $108,000 on spot markets may trigger technical liquidations and push BTC back toward the $100,000 psychological level.

“Support at $108,000 is the key long defense zone. A decisive breach there may trigger profit taking and shift structure to short bias,” note Bitunix analysts.

Outlook: Consolidation vs. Renewed Upswing

While short‐term models point to consolidation risk without fresh buying, the larger on‐chain and derivatives framework remains constructive. Should spot volumes pick up and institutional flows continue, Bitcoin may break out of this pivot zone and resume its multi-year uptrend. For now, market participants will be closely watching liquidity, funding rates, and key support levels to gauge the next directional move.