Bitcoinis once again at the center of attention after a powerful surge pushed its price above$124,000. The world’s largestcryptocurrencyadded more than$1,300 in 24 hours, marking one of its strongest rallies this quarter. Yet, analysts are now questioning how long this momentum can last. Behind the rising charts, key data points suggest the rally could be running out of fuel.

Latest on-chain metrics show that Bitcoin’s network activity is weakening even as prices rise. The number of active wallet addresses has dropped to its lowest point since April 2020, according to data reported by BeInCrypto. This decline means fewer real users are moving coins or making transactions.

In previous bull runs, price gains were supported by growing user participation. This time, that pattern has reversed, and it’s raising doubts about the strength of the move.

Another concern comes from the futures market. Totalopen interest in Bitcoin futureshas reached about$92.14 billion, reflecting heavy use of leverage among traders. High leverage often signals growing risk in the market because even a small drop in prices can trigger large liquidations. When leveraged positions unwind, they can cause a rapid downward spiral that erases recent gains within hours.

Despite optimism among retail traders, the data shows the current move may be driven more by speculation than genuine demand. Analysts point to the widening gap between Bitcoin’s market price and its underlying activity as a warning sign.

If buying interest weakens, the price could pull back toward$120,000, which remains a key support zone in technical charts. A further decline toward$115,000cannot be ruled out if market sentiment shifts suddenly.

Still, calling this a crash may be premature. Bitcoin remains in a long-term bullish trend, supported by institutional adoption and favorable liquidity conditions in global markets. However, the short-term setup looks overheated.

The mix of shrinking on-chain activity and record leverage often precedes corrections rather than sustained rallies. Traders who entered late in the move may face higher volatility in the coming days.

At this stage, Bitcoin’s outlook depends heavily on whether network usage picks up again. Rising transaction volume and higher wallet activity would indicate renewed fundamental support. Without that, the rally could lose steam quickly as speculative positions unwind.

As of Monday evening, Bitcoin was trading around $124,580, with an intraday high of $124,881 and a low of $122,521. The Crypto Fear & Greed Index stood at 74, signaling a market leaning toward greed — another traditional warning that the market may be overheating.

Analysts agree that a modest correction of five to ten percent could actually strengthen the broader uptrend by clearing excess leverage from the system. But if fundamentals remain weak, the correction could deepen. For now, Bitcoin remains volatile but resilient, balancing between euphoria and exhaustion.

Whether this pump turns into a breakout or a breakdown will depend on how quickly real demand returns to the network.

Why is Bitcoin reaching new highs now

Bitcoin’s price surge is fueled by multiple factors that are creating bullish sentiment. First, growing institutional investment has added credibility and capital to the market. Big investors and funds are increasingly seeing Bitcoin as a long-term asset, which has boosted confidence among retail traders.

At the same time, macroeconomic concerns such as inflation, a weakening dollar, and uncertainties in global markets have led investors to look for alternative stores of value. Bitcoin is often seen as a “digital gold,” providing a hedge against traditional financial risks. This has contributed to the price climbing steadily over recent weeks.

The number of active Bitcoin addresses, a key measure of network health and demand, is nearing levels last seen in 2020. Traditionally, a solid bull run is supported by increased transaction activity and new user adoption. However, the current rally seems mainly driven by speculative traders and high leverage in futures markets.

High futures open interest, hitting record annual levels, raises concerns about potential sharp corrections. When leverage is high, even small shifts can trigger rapid sell-offs. Analysts suggest that without a rebound in genuine user activity, Bitcoin’s price could face a pullback toward the $120,000 range.

Nonetheless, some market forecasts remain bullish. Positive momentum and historical patterns of strong October performance in Bitcoin, known as “Uptober,” hint at possible gains beyond current levels. Institutional interest through ETFs and corporate acquisitions also supports higher prices.

Who is holding Bitcoin and who is selling

Not all investors are benefiting equally from the rally. Long-term holders, who usually provide stability to the market, have been selling some of their Bitcoin. This profit-taking can signal that experienced investors are preparing for potential price corrections.

On the other hand, short-term holders and newer participants are stepping in. While this brings fresh activity, it can also make the market more sensitive to volatility. Fewer active wallets overall suggest that the increase in price is concentrated in a smaller number of hands.

This imbalance between long-term and short-term holders raises questions about how sustainable the rally is. If retail participation remains low and speculation dominates, sudden price swings could occur. Investors need to monitor wallet activity and holding patterns closely.

How risky is the current Bitcoin rally

Several indicators point to possible risks ahead. First, futures and leveraged trading have reached record highs. High leverage can amplify gains but also accelerate losses if prices drop suddenly. Traders should be aware that a highly leveraged market can move very quickly.

Second, the decline in active wallets shows that fewer participants are actively trading. This reduces market depth and makes it easier for large trades to move the price dramatically. A market dominated by fewer hands can be unpredictable and prone to sharp corrections.

Finally, profit-taking by long-term holders may continue. Experienced investors often sell during rallies, locking in gains before a potential downturn. Combined with increased leverage and concentrated ownership, this could create a volatile environment in the short term, even if the long-term outlook for Bitcoin remains positive.

What should investors do in this uncertain environment

For those considering Bitcoin investment, caution is key. Monitoring the market closely and setting clear entry and exit strategies can help manage risk. Avoiding over-leverage and keeping trades within manageable limits is essential in a market that can swing quickly.

Diversification also matters. Holding a mix of assets, rather than relying solely on Bitcoin, can reduce exposure to sudden price drops. Investors should also pay attention to wallet activity and market sentiment. A rally driven mainly by speculation is less stable than one supported by broad participation.

Education is another critical tool. Understanding the differences between short-term speculation and long-term investing can help individuals make more informed decisions. Using tools like stop-loss orders and position sizing can also protect against extreme losses in volatile markets.

What could happen next for Bitcoin

The immediate future for Bitcoin is uncertain. While the cryptocurrency’s price has reached new highs, the combination of fewer active wallets, concentrated holdings, and rising leverage increases the risk of a pullback. Volatility may rise in the coming weeks, especially if profit-taking continues or speculative trading dominates.

Long-term investors remain optimistic. Bitcoin’s fundamental narrative as a digital store of value continues to attract attention, and adoption by institutional players provides a strong foundation for growth. However, short-term fluctuations are likely as the market digests recent gains and new participants enter the space.

Ultimately, Bitcoin remains a high-risk, high-reward asset. Investors who understand market dynamics, manage risk carefully, and stay informed are better positioned to navigate both the opportunities and challenges ahead.

While Bitcoin has surged to impressive new highs, the fall in on-chain activity combined with high futures leverage presents risks of a price correction. Investors should watch network metrics closely as they may dictate the sustainability of this rally.

Bitcoin price today hovers around $124,000 amid these mixed signals of strength and caution. The coming weeks will be critical for price stability and potential continuation of this momentum.