Is Bitcoin Peaking? Analysts Warn

BCA Research Signals Bitcoin May Have Peaked as Profitability Hits Historic Levels

Bitcoin’s recent price action suggests a potential market top, according to analysts at BCA Research. They highlight that the percentage of bitcoin in profit has reached levels historically associated with previous peaks.

After hitting a record high on Jan. 20—coinciding with former President Donald Trump’s inauguration—bitcoin has since declined 10%. While such volatility is common, BCA Research, which has maintained a bullish stance over the past two years, is now expressing caution.

Juan Correa, a strategist for global asset allocation at BCA, points to several red flags. One is Trump’s direct involvement in launching two low-float memecoins, which BCA analysts see as a sign of speculative excess rather than a broadening of crypto adoption.

Although memecoins account for less than 2% of the total crypto market and are largely avoided by institutional investors, their rise reflects a broader surge in optimism toward digital assets. Bitcoin ETFs have become the most successful in history, and BlackRock CEO Larry Fink has suggested that major investors may allocate up to 5% of their portfolios to bitcoin, even speculating on a potential price target of $700,000.

“We are concerned that this level of euphoria signals we are near a top,” BCA analysts warn. They emphasize that over 90% of bitcoin supply is currently in profit, a historical marker that has often preceded market peaks. Additionally, eight of the ten most downloaded financial apps are crypto trading platforms, further indicating speculative fervor.

Macroeconomic risks also loom. BCA notes that if government deficit spending is lower than expected, it could dampen bitcoin’s rally. “A U.S. economy that is both cooler and more fiscally responsible than anticipated may not support bitcoin’s recent surge,” they explain.

Despite their cautious outlook, BCA remains structurally positive on bitcoin’s long-term role in a diversified portfolio. However, they caution that sentiment-driven rallies can lead to unsustainable price levels. “We would be more enthusiastic buyers at $75,000,” they state.

One factor that could challenge their bearish view is Trump’s proposal for a strategic bitcoin reserve, which would involve holding crypto assets seized by law enforcement. “While this might provide a short-term boost, in our view, it would likely mark the top of the cycle,” BCA notes.

Reflecting the current speculative environment, BCA has even launched its own satirical memecoin, Liquidity Trap. “The name is both a nod to our firm’s historic work on liquidity and a literal warning—any money put into this coin will almost certainly be lost forever,” they quip.