The price of Bitcoin has been experiencing a choppy market condition, putting a halt to hopes of a breakout to new highs in the near future. Despite this, there is still optimism surrounding the current bull cycle, with the premier cryptocurrency taking its time to gather momentum for an upward trend. Recently, on-chain observations have indicated that Bitcoin has entered a phase known as the “euphoria wave,” which may have significant implications for the ongoing bull run.
The blockchain intelligence firm Glassnode has identified the Euphoria Wave based on the “Percent Supply in Profit” metric, which measures the percentage of the total circulating Bitcoin supply that is currently in profit. According to Glassnode, the Euphoria Wave occurs when the supply in profit hovers around the 90% level. This phase is typically characterized by heightened investor sentiment and increased market speculation, lasting between 6 to 12 months. Currently, 93.4% of the circulating Bitcoin supply is in profit, indicating that the Euphoria Wave is still in its early stages, lasting around two and a half months.
As with any phase in the market cycle, the Euphoria Wave will eventually reach its peak and come to an end. Historically, the euphoria phase often signals market tops and is 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, there may still be a few months left in the current bull run. The profitability of Bitcoin will play a crucial role in determining the duration of this cycle and its overall trajectory.
Market Sentiment and Accumulation
A key indicator of bullish sentiment towards Bitcoin is the continuous rise in accumulation addresses. According to on-chain analysts, there has been a notable increase in the number of new BTC accumulation addresses, despite the relatively slow price action in May. Additionally, large holders of Bitcoin have been actively accumulating more coins, reflecting confidence in the future price of the cryptocurrency. At the time of writing, Bitcoin is valued at $67,744, with a slight increase of 0.4% in the last 24 hours and a 15% increase in the past month, according to data from CoinGecko.
The Euphoria Wave that Bitcoin is currently experiencing has significant implications for its ongoing bull run. While the market remains choppy and uncertain, the high percentage of Bitcoin supply in profit suggests that the premier cryptocurrency may still have room to grow before reaching its peak. Understanding these market cycles and on-chain metrics can provide valuable insights for investors and traders looking to navigate the volatile world of cryptocurrencies. It will be interesting to see how Bitcoin’s price evolves in the coming months as the Euphoria Wave plays out its course.
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