Bitcoin Surges in Euphoria Wave, Mirroring Bullish Run Patterns


In a swirl of market activity, intriguing indicators reveal that Bitcoin, the digital currency giant, has been cresting a ‘euphoria wave’ for the last two months. This intriguing period strongly mirrors its last bullish run, when its value soared for a similar duration before plateauing.

According to the most recent analysis by on-chain analytics powerhouse, Glassnode, there’s a fascinating parallel between Bitcoin’s current financial cycle and the previous one, particularly in relation to the “Supply Profitability State”.

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This revealing metric, based on the “Percent Supply in Profit,” meticulously reflects the percentage of Bitcoin’s total circulating supply that is, at the moment, registering a profit. To put it simply, it inspects the historical transactions of each circulating Bitcoin to ascertain the price at its last transfer point. Assuming that this last exchange represents the final change of hands, the price at that time would denote the coin’s cost basis.

Naturally, if this cost basis is lesser in value than Bitcoin’s real-time spot price, the coin in question carries a tangible net unrealized gain. To embody a comprehensive understanding, the “Percent Supply in Profit” amalgamates all such coins and presents the percentage they constitute of the total supply.

In accordance with the market’s profitability status, the Supply Profitability State portrays the current phase of Bitcoin. Interestingly, recent trends in this metric swerves to a definitive green, indicating an optimistic outlook.

In the presented chart, three distinct lines represent the Bitcoin “Percent Supply in Profit”. The central blue-colored line embodies the cumulative mean of the metric, whereas the other two lines represent the +1 (green) and -1 (red) standard deviation (SD) parameters from this average.

A market basking in the glow of euphoria or pre-euphoria phase is represented when the “Bitcoin Percent Supply in Profit” exceeds the +1SD line (approximately 95% of the supply in net gain). Conversely, if the values plummet below the -1SD line, the “Supply Profitability State” reveals a bottom discovery phase, with the zone sandwiched between the two indicating a ‘bear/bull’ transition phase.

A close inspection of the chart showcases that Bitcoin, during its previous bullish run, first rose into a 1.5-month-long pre-euphoria wave where the metric skirted along the +1SD line. The following phase marked a drop and consolidation period, nudging the ‘Supply In Profit’ back below the +1SD line.

A marked rally saw the price break past the +1SD barrier and scale its way to unprecedented heights, naturally adjusting the ‘Supply In Profit’ to a solid 100%.

In comparison to its past performance, Bitcoin has mirrored similar fluctuations in the current cycle. A two-month-long pre-euphoria wave succeeded by a dip has led to another two-month-long euphoria wave where the digital currency has tasted new peaks.

If this euphoria wave emulates its predecessor from the last bull run, Bitcoin could potentially continue its bullish rally for an ensuing four months or more.

However, Bitcoin’s price experienced minor retracement after recovering above an impressive $72,000 vantage point. Though the asset retracted back towards $69,400 level, Bitcoin’s overall performance shows an interesting trajectory that has been bespattered with some drawdown over the last few days according to the BTCUSD on TradingView.