- Bitcoin’s price has entered a period of volatility, dashing hopes for a swift breakthrough to new highs.
- Despite the current state, the ongoing bull cycle might still have room to run, even if momentum has waned.
- Recent on-chain data reveals Bitcoin’s current “euphoria wave” phase and its implications for investors.
Discover Bitcoin’s current market state, the significance of its euphoria phase, and the implications for future price movements.
Understanding Bitcoin’s Current Euphoria Wave
According to Glassnode, a leading blockchain intelligence firm, Bitcoin is experiencing its euphoria phase, marked by the “Percent Supply in Profit” metric. This measures the proportion of Bitcoin supply that is currently showing a profit.
Glassnode notes that the euphoria phase occurs when this metric hovers around 90%. This phase, characterized by heightened market sentiment and speculative behavior, typically lasts between six to twelve months.
Presently, 93.4% of the circulating Bitcoin supply is in profit, indicating the euphoria phase is still in its early stages. Glassnode estimates this phase has persisted for about two and a half months so far.
Historically, the euphoria phase signals market tops and is followed by a cooling period where prices tend to decline. This suggests that while the bull cycle continues, a market correction could be impending.
Increased Bitcoin Accumulation Amidst Price Volatility
A key indicator of sustained bullish sentiment in Bitcoin is the rise in accumulation addresses. Data from CryptoQuant highlights a steady increase in these addresses, even as Bitcoin’s price action has slowed in recent months.
An identified on-chain analyst pointed out that, despite Bitcoin’s stagnant price movements in May, the accumulation has continued. Notably, large Bitcoin holders are still making significant purchases, indicating confidence in the long-term potential of the cryptocurrency.
As of this publication, Bitcoin stands at $67,744, reflecting a modest 0.4% rise in the past 24 hours. Current data from CoinGecko shows a 15% increase over the past month, highlighting enduring positive sentiment.
Conclusion
Bitcoin’s market is currently navigating through the euphoria wave, with substantial portions of its supply in profit. While this signals strong investor sentiment, historical patterns suggest a cooling period could follow. Additionally, the continued rise in accumulation addresses points to enduring confidence among investors, even amidst price fluctuations. As Bitcoin’s market dynamics evolve, closely monitoring these indicators will be crucial for predicting future price movements. The upcoming months will likely be pivotal in determining the trajectory of this bull cycle.
