Expert Reveals Key Price Points That Could Show Bitcoin is Overheated

Predictions that Bitcoin will surge to $300,000 in 2025 are unrealistic, Copper’s head of research has told Cryptonews.

Fadi Aboualfa says close attention must be paid to how quickly BTC rises, rather than the price it eventually hits.

The institutional custody provider has published new research that reveals key levels where Bitcoin could be overheated in the coming year.

That range typically falls somewhere between $140,000 and $200,000 — and fluctuates throughout each month.

Copper says BTC’s 30-day rolling volatility has been in decline — and that ultimately allows for “a longer, smoother price climb.”

Assuming Bitcoin doesn’t exceed the price breaches in the image above, the company argues:

“The longer Bitcoin remains below these levels, the higher it can climb if the market stays bullish and no significant external event intervenes.”

Aboualfa told Cryptonews that BTC is primarily trading as a risk asset right now, meaning it’s rising and falling in line with the wider market.

He says the research is designed to examine when investors might start to take profits off the table.

“We aimed to try and find certain levels that Bitcoin can reach without getting investors to get worried that it went up too fast. Low volatility is actually a good thing.”

Aboualfa argues that traders are much less likely to take profits prematurely when BTC’s price is appreciating at a gradual pace — and a blow-off top at $300,000 would spark dramatic sell-offs.

“Let’s say it was trading at $100,000 — and in six months’ time, it’s suddenly $300,000. There are a lot of players who are going to be willing to sell off their Bitcoin and take profits, because if your asset suddenly jumps up 200% in six months, then you really don’t have to do anything for the rest of the year — and you can still claim you’ve made record returns.”

He warned that institutional investors exiting their long positions en masse would end up affecting the whole market, meaning caution is needed.

“It’s very difficult to argue that an asset that’s suddenly grown from $40,000 at the start of last year, currently trading at $100,000, and in six months’ time is at $300,000 is not an overheated market.”

Aboualfa added that while it’s possible that there could be a downturn in the coming months, it might not be all doom and gloom.

“Our simulations saw a number as low as $50,000 — but in others, it was $70,000, it was $75.000. There is a risk of downside always. What’s more interesting from my perspective from the simulation is that it recovers very quickly — and I think that’s something very different to what we’ve seen in previous markets.”

He pointed to how there were ambitious price targets of $100,000 that weren’t met during the bull run of 2017, while 2021’s peak of $69,000 was followed by a stomach-churning drop to lows of $15,000.

“Now we’ve broken $100,000 — and people are claiming we’re going to reach $500,000. I think it’s very ambitious, and I think it removes the realistic perspective that a lot of investors and traders aren’t buying Bitcoin as a store of value … they don’t need to hold on to their spot after they take their profits. So I think people should be wary about looking at these large price targets — and look more at where we are going, and how fast we get there. If we get there too fast, maybe the markets are suggesting that something’s going on.”

“Buy the Close, Sell the Open”

Aboualfa went on to discuss Copper research that reveals how a strategy called “buy the close, sell the open” helped BTC and ETH traders lock in much healthier returns in 2024 — especially when compared with a classic buy and hold strategy.

This tactic refers to purchasing digital assets when spot ETFs on Wall Street finish trading for the day, and exiting positions once markets go live again the following morning.

Buying and holding onto BTC and ETH delivered returns of 120% and 46%, respectively, across 2024. But buying the close and selling the open on a daily basis — which includes maintaining positions over the weekend — saw this rise to 144% and 153%.

The most eye-popping numbers come when Mondays are excluded, and no trades happen at the start of the week. Here, “The Night Effect” delivered gains of 201% for Bitcoin — surging to 245% for Ether. Aboualfa explained:

“It bypasses a lot of the noise that happens during the day. When the Federal Reserve comes out with statements or their interest rate decisions, that’s happening within the day, and there’s a lot of noise around that.”

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