The price of Bitcoin seems to have settled back into a choppy market condition, dashing hopes for an imminent breakout to new highs. While this may be disheartening for some investors, it is important to note that the current bull cycle may not be over just yet. Despite the premier cryptocurrency taking its time to regain upward momentum, recent on-chain observations indicate that Bitcoin has entered a phase known as the “euphoria wave” in the market cycle.
According to blockchain intelligence firm Glassnode, the euphoria phase is characterized by increased investor sentiment and heightened market speculation. This phase is typically marked by the “Percent Supply in Profit” metric, which measures the percentage of the total circulating Bitcoin supply that is currently in profit. Glassnode’s data reveals that 93.4% of the circulating Bitcoin supply is currently in the green, signaling that the euphoria wave is still in its early stages.
While the euphoria phase may be a positive sign for Bitcoin in the short term, it is important to remember that every phase in the market cycle eventually comes to an end. Historically, the euphoria phase can signal market tops and is often followed by a cooling-off period, resulting in a downturn in the price of Bitcoin. If we look at the previous cycle, which had a 6-month euphoria wave, there might still be a few more months left in the current bull run.
Despite the relatively slow price action of Bitcoin in May, there has been a notable increase in the number of new BTC accumulation addresses. This positive trend indicates a bullish sentiment among investors, with even large holders continuing to accumulate more Bitcoin. The continuous rise in accumulation addresses and significant purchases by large holders suggest that there is still confidence in the long-term potential of Bitcoin.
As of the latest data, Bitcoin is valued at $67,744, reflecting a slight 0.4% increase in the past 24 hours. Over the past month, the pioneer cryptocurrency has seen a 15% increase in its value, showing resilience despite the choppy market conditions. The current profitability of Bitcoin and the ongoing accumulation trend may play a crucial role in determining the duration of the bull cycle and the overall trajectory of the cryptocurrency.
While the euphoria wave may indicate positive investor sentiment and market speculation, it is essential to approach the current market conditions with caution. As with any phase in the market cycle, the euphoria phase will eventually come to an end, potentially leading to a cooling-off period and a downturn in Bitcoin’s price. Investors should closely monitor on-chain data and market trends to make informed decisions about their investments in the premier cryptocurrency.
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