The price of Bitcoin seems to have settled back into a choppy market condition, dimming any hopes of a quick breakout to new highs. Despite this setback, there is still a glimmer of hope that the current bull cycle is not yet over, even though Bitcoin is taking its time to regain its upward momentum. The latest on-chain observation reveals that Bitcoin has been experiencing what analysts call a “euphoria wave” over the past few months. This phase, as identified by the “Percent Supply in Profit” metric, indicates the percentage of the total circulating Bitcoin supply that is currently in profit.
According to Glassnode, a blockchain intelligence firm, the euphoria phase is characterized by the supply in profit hovering around the 90% level. This phase typically lasts between 6 to 12 months and is marked by heightened investor sentiment and increased market speculation. Glassnode’s data shows that 93.4% of the circulating Bitcoin supply is currently in profit, and the Euphoria Wave is still considered to be in its early stages, having been active for about two and a half months. However, it is important to note that like every phase in the market cycle, the Euphoria Wave will eventually come to an end.
Market Signals and Investor Sentiment
Historically, the euphoria phase can serve as a signal of market tops and is often followed by a cooling-off period, leading to a downturn in Bitcoin’s price. If we consider the previous cycle with a 6-month Euphoria Wave, it is possible that the current bull run still has about three to four months remaining. The profitability of Bitcoin at this moment could play a crucial role in determining the duration of its bull cycle and its future trajectory.
A notable indicator of the bullish sentiment surrounding Bitcoin is the continuous increase in accumulation addresses. An on-chain analyst on CryptoQuant’s platform highlighted the growing number of new BTC accumulation addresses, even amidst Bitcoin’s sluggish price action in May. Furthermore, large Bitcoin holders have been consistently adding to their positions, making significant purchases over the past month. As of the latest data, Bitcoin is trading at $67,744, reflecting a modest 0.4% increase in the last 24 hours. CoinGecko data shows that the pioneer cryptocurrency has seen a 15% rise in value over the past month.
The current state of the Bitcoin market remains uncertain, with various indicators suggesting both bullish and bearish outcomes. The Euphoria Wave, along with the continued accumulation of Bitcoin by investors, paints a picture of optimism for the cryptocurrency’s future. However, caution is advised as historical patterns indicate that market cycles are inherently volatile and subject to sudden shifts. Investors should carefully monitor the evolving market conditions and stay informed to make well-informed decisions in this dynamic environment.
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