The cryptocurrency market, with Bitcoin at the forefront, is once again grabbing attention as it approaches unprecedented price levels. Glassnode, a leading analytics platform, has shed light on this phenomenon, describing the current state of the market as entering a phase of “Euphoria.” This phase is characterized by a significant portion of Bitcoin’s supply being held in profit, indicating heightened optimism and confidence among investors.
As Bitcoin teeters on the verge of surpassing its previous all-time high of $73,000 set in March, the market dynamics suggest a cautious optimism. According to Glassnode, approximately 93.4% of Bitcoin’s total supply is currently in profit. This indicator has remained around the 90% mark for about 2.5 months, indicating a sustained positive sentiment among holders.
The euphoria phase typically lasts for six to twelve months and is marked by prolonged periods where a large majority of the supply remains profitable. It often coincides with significant price discovery phases. As the Bitcoin market breaks towards a new all-time high and enters the euphoria phase, the supply in profit will fluctuate around the 90% level for the next 6-12 months.
Despite the promising indicators, Bitcoin still faces challenges in fully reclaiming its peak price levels. Currently trading below $68,000, with a recent price point of $67,435, the cryptocurrency has experienced a slight decline of 1.4% in the past day. However, it has recorded incremental gains of 2.8% and 1.6% over the past two weeks and seven days, respectively, indicating a resilient upward trend amidst market fluctuations.
Understanding the behavior of Bitcoin during this euphoria phase is crucial for investors. The term “euphoria” in market analysis typically signifies a peak in positive sentiment, which can sometimes lead to overvaluation if not supported by fundamental growth factors. However, the sustained high percentage of supply in profit suggests that the current market condition may still have room to grow before reaching a potential saturation point.
