The digital asset analytics firm IntoTheBlock says certain factors could be hinting at “speculative overheating” in the crypto market.
IntoTheBlock notes on the social media platform X that funding fees for perpetual swaps have jumped to more than 10% and even skyrocketed to 20% on major exchanges.
“Such high costs signal growing bullish sentiment among traders. While still below Q1 peaks, sustained demand at these levels could hint at speculative overheating…
A major driver is likely the US government’s approach to crypto under Trump. With ‘strategic Bitcoin reserves’ on the horizon, many feel incredibly bullish on Bitcoin reaching a valuation far beyond $100,000.
People really want $100,000 BTC. Past cycles show more than one significant drawdown. It wouldn’t be a bad place for such a pullback.”
Bitcoin is trading at $98,783 at time of writing. The top-ranked crypto asset by market cap hit a new all-time high of $99,645 at one point on Friday morning and is up nearly 1% in the past 24 hours and more than 8% in the past week.
IntoTheBlock also notes that BTC witnessed $4.5 billion in net outflows off exchanges this week. The analytics firm defines net outflows as the number of coins that have left crypto exchanges minus inflows, or withdrawals minus deposits.
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