As the cryptocurrency market continues to evolve, Bitcoin's latest rally has encountered a significant technical and on-chain resistance zone, prompting CryptoQuant research head Julio Moreno to caution about elevated correction risk. The current scenario has drawn parallels with the March 2022 cycle, where Bitcoin experienced a 43% price increase before hitting the 200-day moving average, only to resume its downward trend. This historical context raises questions about whether the current rally has durable support or is merely a bear-market rebound running out of momentum.
According to CryptoQuant's analysis, the 200-day moving average is not just a technical line on the chart, but a critical zone where prior bear-market rallies have failed due to weak demand and heavy profit-taking. The firm's research highlights several indicators that point to an increased risk of correction, including high unrealized profits, a spike in profit-taking across spot and futures markets, and slowing US spot demand. The rise in unrealized profits among traders has reached 17.7%, the highest level since June 2025, which could lead to holders with sizable paper gains becoming more willing to sell into strength, especially as the rally approaches a widely watched resistance level.
Market Dynamics and Key Support Levels
CryptoQuant's report also notes that realized profit data suggests some selling has already begun, with daily realized profits surging to 14.6K BTC on May 4, the highest level since December 10, 2025. This spike in selling activity has historically preceded local tops in bear-market rallies, as newly profitable short-term holders accelerate selling into price strength. Furthermore, the demand side of the market remains a weak point, with the Coinbase Bitcoin Price Premium turning negative in late April and staying below zero as Bitcoin approached $80,000. This lack of sustained positive Coinbase premium suggests that the current move lacks broad-based US institutional conviction.
In the event of a correction, CryptoQuant has identified the main on-chain support level near $70,000, represented by the Traders' On-chain Realized Price. This level has historically acted as a resistance-turned-support band in bear markets, reflecting the average cost basis of short-term traders. As the market continues to navigate this critical test, it remains to be seen whether Bitcoin's rally has the durable support needed to push through the current resistance zone or if it will follow the historical pattern and resume its downward trend.
