Has Bitcoin Reached “Euphoria” Yet? What On-Chain Data Says

Keshav Verma

Last Updated: June 11, 2024 8:02 am

3 mins read

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Here’s what on-chain data says regarding if the latest Bitcoin rally has hit the overheated “euphoria” stage where past bull runs topped out.

Bitcoin Percent Supply In Profit Has Now Hit The 83% Mark

In its latest weekly report, the on-chain analytics firm Glassnode has discussed about the “euphoric” BTC phase from the angle of investor profitability. Euphoria basically refers to that period of the market where the investors have started embracing greed and the rally is becoming heated.

Historically, the major rallies in the asset have attained their tops in such market conditions. To define what constitutes euphoria, Glassnode has referred to the “percent supply in profit” metric. This indicator keeps track of the percentage of the total circulating Bitcoin supply that’s currently being held at a profit.

Here is a chart that shows the trend in this indicator over the past decade:

The value of the metric seems to have observed a large spike in recent days | Source: Glassnode's The Week Onchain - Week 47, 2023

As displayed in the above graph, the Bitcoin percent supply in profit has naturally shot up as the latest rally in the cryptocurrency has occurred and the metric’s value is now floating around the 83% mark.

The all-time mean of the metric is 74%, so the current levels are notably above this level. In the chart, the analytics firm has also marked the +1 standard deviation line for the indicator, above which the market can be thought to have entered into the early stages of the euphoria phase.

The +1 standard deviation line for the metric is around 90%, so the current profitability levels are still below the mark but are nonetheless quickly closing in the gap.

As mentioned before, these profitability levels are in terms of the supply or the coins, calculated by checking for the number of tokens that have their cost basis below the current spot price.

There is another way to gauge profitability, however, and it’s the magnitude of the profits that these coins are combined are seeing right now. This unrealized profit is naturally calculated by subtracting the cost basis of each coin from the current spot price and summing up these differences for the entire supply in profit.

The data for the unrealized profit over the past decade | Source: Glassnode's The Week Onchain - Week 47, 2023

“For the analysis of investor behavior, often the unrealized profit is a more critical variable as it relates back to the USD-denominated profit of investor positions,” explains Glassnode.

From the graph, it’s visible that the +1 standard deviation line for this Bitcoin indicator is still quite a distance away from the current value, meaning the coin is far from reaching the euphoric state of the bull market.

“This suggests that whilst a significant volume of the supply is in profit, most have a cost basis, which is only moderately below the current spot price,” notes the report.

BTC Price

Bitcoin has gone through some volatility over the past day following the news of Changpeng Zhao (CZ) stepping down as Binance’s CEO. The asset had earlier slipped below the $36,000 level but has since recovered back to $36,600.

Looks like BTC has been mostly trading sideways recently | Source: BTCUSD on TradingView

Featured image from Yiğit Ali Atasoy on Unsplash.com, charts from TradingView.com, Glassnode.com

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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