Take profit sell wall increases Bitcoin adjustment risk = Renowned analyst Willy Woo

## Bitcoin market conditions

Prominent cryptocurrency analyst Willy Woo mentioned the overheating of the Bitcoin market in a post on X (formerly Twitter) on the 27th, warning that the pressure for profit-taking is increasing.

Source: Willy Woo

Mr. Woo, who has a reputation for analysis using on-chain data, presented a short-term chart using a speculative model that shows speculative trading activity and a SOPR model that shows the ratio of fixed profit and loss. Despite the ample opportunity for investors to make a profit, he pointed out that bitcoin speculators are in a frenzy.

SOPR (Spent Output Profit Ratio) is an indicator that shows how much profit/loss there was when Bitcoin was traded. When SOPR is above 1, it indicates that many investors are in a state of realizing profits.

The chart presented by Mr. Woo indicates a situation where both speculation and SOPR are at high levels, with further new purchases occurring despite the potential for profit-taking. In response to this situation, Mr. Woo quoted Warren Buffett's famous saying, "Be fearful when others are greedy," sounding the alarm against overheating speculation.

Another analyst, "Darkfort," pointed out that in this situation, NUPL (Net Unrealized Profit/Loss) may be more appropriate than SOPR (Spent Output Profit Ratio). He mentioned that the current value of NUPL is around 0.63 to 0.64, which is approaching a level that has functioned as "an important threshold" in the Bitcoin cycle.

Source: Darkfor

This level is known as the peak level of overheating in the market cycle, and historically, there have been cases where Bitcoin significantly dropped in price after reaching its all-time high in December 2017 and November 2021.

Risk of Transition to a Bear Market

Mr. Woo pointed out that there has been a significant decline in capital inflow to the network over the past three days, indicating an "unusual pause" during the rise from $75,000 to $112,000. He stated that structural shift signals are showing the first signs of turning bearish.

This week, following the holiday of Memorial Day for fallen soldiers in the United States, he argues that the extent of buying pressure that returns will significantly influence future trends. If buying pressure recovers this week and prices rise further, the next target of $114,000 will come into view, and he predicts that short position liquidations will occur.

Source: Willy Woo

Although the overall market environment remains bullish due to the decrease in risk signals, there is a possibility that if further highs are not reached soon, a wave of profit-taking could continue, leading to a price adjustment phase.

On the other hand, the news that the Trump Media & Technology Group, founded by President Trump, has raised a total of $2.5 billion (360 billion yen) and will implement one of the largest Bitcoin financial strategies among publicly traded companies is drawing attention. It has also been pointed out that the strength of macro factors such as a series of large-scale institutional investments may outweigh the risks of short-term adjustments.