The price of Bitcoin has once again entered a choppy market condition, dampening hopes of a sudden breakout to new all-time highs. Despite this, there is optimism that the current bull cycle may not be over yet, as the premier cryptocurrency struggles to regain its upward momentum. Recent on-chain observations suggest that Bitcoin has been experiencing what is being referred to as a “euphoria wave” in the market, which could have significant implications for the ongoing bull run.
According to blockchain intelligence firm Glassnode, Bitcoin has entered the euphoria phase of the market cycle based on the “Percent Supply in Profit” metric. This metric measures the percentage of the total circulating Bitcoin supply that is currently in profit. The euphoria phase is characterized by the supply in profit hovering around 90% and typically lasts between 6 to 12 months. The current data from Glassnode indicates that 93.4% of the circulating Bitcoin supply is currently in profit, and the euphoria phase is still considered to be in its early stages, having been active for only about two and a half months.
Just like any other phase in the market cycle, the Euphoria Wave will eventually come to an end. Historically, the euphoria phase has often signaled market tops and is followed by a period of consolidation or correction, leading to a downturn in the price of Bitcoin. If we look back at the previous cycle, which had a 6-month Euphoria Wave, there may still be several months left in the current bull run. The profitability of Bitcoin at this stage could play a crucial role in determining the duration of the bull cycle and its future trajectory.
A key indicator of the bullish sentiment surrounding Bitcoin is the continuous rise in accumulation addresses. On-chain analytics from CryptoQuant’s platform show a notable increase in the number of new BTC accumulation addresses, indicating ongoing interest in acquiring and holding the cryptocurrency. This positive trend has persisted despite Bitcoin’s relatively slow price action in recent months. Additionally, large holders of Bitcoin have been increasing their positions, with significant purchases being recorded over the past month.
As of the latest data, Bitcoin is trading at $67,744, reflecting a modest 0.4% increase over the past 24 hours. Over the course of the last month, the pioneer cryptocurrency has seen a 15% increase in its value, showing resilience amidst the market fluctuations. The combination of market dynamics, investor sentiment, and on-chain metrics suggests that Bitcoin may still have room to grow within the current bull cycle, despite the temporary setbacks experienced in the recent market conditions.
The euphoria phase in the market cycle could have a significant impact on the future price trajectory of Bitcoin. While there are indications of a prolonged bull run, investors should remain cautious and monitor market developments closely to navigate the volatile cryptocurrency market successfully.
