Key Points:
If the price of Bitcoin breaks through $115,000, it could trigger a parabolic rise, liquidating over $7 billion in short positions.
On-chain indicators have entered the overheating zone, indicating that Bitcoin investors are continuously taking profits.
Bitcoin showed strong momentum on May 27, briefly touching $110,700 after a strong opening in the U.S. stock market and the announcement from Trump Media Technology Group that it would raise $2.5 billion for Bitcoin reserves.
This bullish momentum for Bitcoin aligns with the favorable financial environment in the U.S., as noted by Ecoinometrics. This macroeconomic-focused Bitcoin market analysis newsletter emphasizes that the National Financial Conditions Index (NFCI) shows a rapid shift to an extremely loose state following a tightening phase in February 2025.
The NFCI released by the Chicago Federal Reserve tracks financial system stress through indicators such as credit spreads, leverage levels, and financing conditions. When the index moves toward a looser area, it reflects easier capital access and reduced market stress—conditions that typically stimulate risk-seeking behavior among investors.
For high-beta assets like Bitcoin, such periods are often accompanied by price increases as funds flow into speculative markets.
U.S. National Financial Conditions Index. Source: Ecoinometrics
Ecoinometrics points out that market liquidity has recovered in just four weeks, creating a favorable macroeconomic environment for risk assets like Bitcoin. The newsletter emphasizes, "This is the macro backdrop for Bitcoin's thriving. The surge to new highs for Bitcoin did not come out of nowhere; it follows the same pattern we've observed since 2023: financial environment loosening → funds shifting → increased risk appetite."
Currently, the price of Bitcoin is just 2% away from its all-time high, and CoinGlass data shows that due to significant seller liquidity, the likelihood of a short squeeze remains high. As shown in the chart below, if Bitcoin breaks through $115,000, over $7 billion in short positions will face liquidation risk, which could trigger a chain reaction pushing prices further up.
Bitcoin Liquidation Chart. Source: CoinGlass
Despite the overall bullish momentum, Bitcoin's rise has pushed the market into a zone that requires caution, consistent with historical patterns. Two key on-chain indicators—the Supply Profitability Band and the Advanced Net UTXO Supply Ratio—are signaling warnings consistent with previous market tops.
The Supply Profitability Band indicator tracks how many circulating Bitcoins are in profit. As of the end of May 2025, this number has climbed to 19.4 million Bitcoins, nearing historical highs and entering the "overheating zone." Previously, Bitcoin's price tested this area on December 17, 2025, before retracing from $107,000 to $93,000.
Bitcoin Supply Profitability Band. Source: CryptoQuant
At the same time, the Advanced Net UTXO Supply Ratio (NUSR)—which compares profitable to unprofitable UTXOs (unspent transaction outputs)—is approaching its historical ceiling of about 0.95, a level that typically signals a sell. The red markers on the chart indicate previous similar conditions that led to local price tops or long-term consolidations.
Bitcoin Advanced Net UTXO Supply Ratio Chart. Source: CryptoQuant
The above data does not necessarily mean that prices will immediately decline, but these indicators suggest a higher likelihood of increased market volatility and profit-taking by investors in the short term.
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This article does not contain any investment advice or recommendations. Any investment and trading activities involve risks, and readers should conduct their own research before making decisions.
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