Main Points:
- Sustained Rise Without Overheating: CryptoQuant analyst Avocado_onchain identifies Bitcoin’s current rally as a “healthy bull market,” noting the absence of overheating signals in funding rates and market buy volumes.
- Contrast with Previous Cycles: Unlike the March 2024 and January 2025 peaks—both followed by sharp corrections—this cycle’s rebound lacks explosive leverage-driven buying pressure.
- Swissblock’s Bitcoin Fundamental Index (BFI): Swissblock confirms a neutral-to-bullish stance, with no indications of a classic double-top or bearish divergence in on-chain fundamentals.
- Record CryptoQuant Bull Score: The CryptoQuant Bull Score hit its highest level of 2025 on May 14, reflecting robust trading conditions, rising accumulation addresses, and a positive institutional sentiment.
- Institutional ETF Flows and Equity Correlations: Bitcoin ETF inflows and a rally in major stock indices like the Nasdaq have contributed to risk-on momentum spilling into the crypto markets.
- Key Technical Indicators: RSI remains below overbought thresholds, MACD shows a bullish crossover, and exchange netflows are negative—signs of continued upward momentum with manageable risk.
- Trading and Investment Implications: The confluence of healthy on-chain metrics and institutional engagement suggests opportunities for strategic long positions, while prudent risk management remains essential.
1. A Healthy Bull Market: No Signs of Overheating
CryptoQuant’s registered analyst Avocado_onchain recently highlighted that Bitcoin’s ascent toward new highs is occurring without typical overheating signs, such as abrupt spikes in perpetual futures funding rates or surging market-buy order volumes. Instead, funding rates have remained subdued, and Binance’s market buy volumes are on a gentle downtrend—signals that differ markedly from the March 2024 and January 2025 peaks, both of which were followed by swift, leverage-fuelled corrections.
Such temperate conditions imply that the rally is driven more by gradual accumulation and genuine demand than by short-term speculative fervor. Where past highs were characterized by a manic scramble—pushing funding rates to extremes and culminating in painful retracements—today’s market exhibits measured growth, suggesting a more sustainable trajectory.
2. Learning from Past Cycles: Avoiding the Overheating Trap
In both previous bull-market climaxes (March 2024 and January 2025), Bitcoin’s price surges were accompanied by:
- Spiking Binance market-buy volumes, indicating frenzied retail and algo-driven purchases.
- Sharp rises in perpetual futures funding rates, reflecting crowded long positions and heightened leverage.
These conditions invariably triggered overheated corrections, leading to protracted consolidation and investor capitulation. According to Avocado_onchain, after each of those peaks, the market endured significant psychological sell-pressure as traders exited en masse, only to later re-accumulate at lower prices once the dust settled.
Contrast this with the current move: funding rates remain within normal bounds, and buy volumes have moderated, pointing to a market that is lighter and more cautious—characteristics of a robust and enduring bull run, rather than a fleeting blow-off top.
3. Swissblock’s Fundamental Confirmation: No Bearish Divergence
On May 20, private wealth manager Swissblock released an analysis using their Bitcoin Fundamental Index (BFI), which measures a basket of on-chain metrics to gauge market health. Swissblock noted that:
- Despite speculation of a double-top pattern, the BFI remained in neutral territory through the February–March correction, never dipping into bearish zones.
- There is no evidence of bearish divergence—a scenario where prices hit new highs but fundamental indicators weaken.
This stability in the BFI underscores that underlying network fundamentals—including transaction activity, long-term holder behavior, and network growth—continue to support the uptrend. Swissblock’s charts show that, even during short-term pullbacks, on-chain strength has been preserved, marking a divergence from cycles where fundamentals softened before major declines.
4. CryptoQuant Bull Score: A Record High in 2025
Further validating the bullish case, CryptoQuant’s proprietary Bull Score hit its highest level of 2025 on May 14, indicating exceptionally strong trading conditions. According to industry analyst AltcoinGordon:
- The Bull Score reflects improved on-chain accumulation metrics, rising volumes, and positive market sentiment.
- As of May 14, 25,000+ new wallets holding ≥0.1 BTC were created in the prior week—25% above last summer’s baseline—even during price corrections.
- Spot trading volumes surged by 38%, and Bitcoin traded around $72,350, up 4.2% in 24 hours.
This surge in the Bull Score signals that buyers are stepping in aggressively, and market participants anticipate further upside.
5. Institutional Flows and Equity Market Momentum
The crypto-equity nexus has become increasingly pronounced. A 1.5% rally in the Nasdaq on May 13 to 18,450 points contributed to risk-on sentiment, boosting Bitcoin’s price as capital rotated from tech stocks into digital assets. Concurrently:
- Bitcoin ETF inflows reached $320 million on May 13, underscoring institutional appetite.
- Exchange netflows for BTC turned negative, with a net outflow of 12,500 BTC over 48 hours, indicating coins moving off exchanges into cold storage—another bullish sign.
Together, these factors paint a picture of institutional and retail convergence, where broad market optimism is channeled into Bitcoin and select altcoins.
6. Technical Indicators: Room for Further Upside
From a technical standpoint:
- RSI (4-hour) sits at 68, just below the overbought threshold of 70—implying upside room before extreme conditions set in.
- MACD shows a bullish crossover, with the MACD line above the signal line, reinforcing upward momentum.
- Key resistance levels loom at $75,000 for Bitcoin and $3,000 for Ethereum—but each breakout would likely attract fresh buying and fuel the next leg higher.
These technical signals, combined with solid on-chain fundamentals, suggest that the path of least resistance remains upward, albeit with prudent stops to guard against sudden reversals.
7. Trading and Investment Implications
For investors and traders seeking new sources of yield and practical blockchain applications:
- Strategic Long Positions: Consider scaling into Bitcoin around support levels ($70,000), using tight stop-losses to manage risk.
- Altcoin Opportunities: Ethereum and Solana, up 3.8% and 5.1% respectively, benefit from the spillover effect—look for entries on minor pullbacks.
- Institutional Rotations: Monitor equity-crypto flows; a sell-off in equities could temporarily drag crypto lower, presenting buying windows.
- On-Chain Monitoring: Track metrics like netflows, accumulation addresses, and funding rates—shifts in these can presage major trend changes.
This data-driven approach aligns with the user profile of seeking new crypto assets and practical DeFi applications—leveraging on-chain insights to optimize entry and exit points.
Conclusion
Bitcoin’s current rally exhibits hallmarks of a healthy, enduring bull market: moderate funding rates, cooling market-buy volumes, robust on-chain fundamentals, and record institutional sentiment via the CryptoQuant Bull Score. Coupled with supportive technical indicators and favorable equity-crypto dynamics, the outlook remains constructively bullish. However, risk management—through strategic stops and vigilant monitoring of on-chain and market signals—remains paramount. For investors hunting new crypto opportunities and real-world blockchain use cases, the present environment offers fertile ground for measured, data-backed strategies that balance upside potential with disciplined capital protection.
