Bitcoin's Current Bullish Phase Shows Growth Potential Before Overheating

In my view, Bitcoin (BTC) is currently experiencing a state of steady consolidation just below the $120,000 mark, with new investor dominance gradually increasing. Although the on-chain data indicates that BTC is still far from overheated, with new investor participation at around 30%, it suggests potential for further bullish movement before risk of correction rises. Past instances where new investor dominance exceeded 60-70% have resulted in local price tops and subsequent pullbacks, but we are not near those levels yet. The data also shows that older holders are still moderately selling, and the supply of three-year-old BTC is absorbing new demand without sharp disruptions. This balanced supply/demand indicates a healthy late bull cycle phase, where the market still has room to grow before significant profit-taking occurs. Therefore, from a technical and on-chain perspective, the risk of an imminent large-scale capitulation appears low, supporting the case for continued bullish momentum. However, some technical indicators suggest waning momentum, such as the recent decline in the Bitcoin Coinbase Premium Gap, which signals a cooling of US investor enthusiasm. Despite this, macroeconomic factors like the correlation with M2 money supply could still propel BTC toward new all-time highs in the short term. Currently trading at approximately $118,371, a slight daily increase reinforces the possibility of further upward movement, but traders should remain cautious of potential short-term stalls or corrections. Overall, the market seems to be in a late bull cycle phase with healthy fundamentals, but monitoring on-chain signals, especially investor dominance and macro trends, remains crucial to anticipate any shifts in momentum or risk of correction.