The Latest Bitcoin Rally
According to the latest report from Glassnode, the Bitcoin rally is reaching a potentially “euphoric” stage, indicated by investor profitability. Euphoria represents a period in the market where investors become greedy, and the rally becomes overheated. This phase has historically signaled the top of major rallies in the asset. Glassnode is using the “percent supply in profit” metric to define euphoria, which keeps track of the percentage of the total circulating Bitcoin supply currently held at a profit.
This indicator has now hit the 83% mark, as shown in the chart below, indicating a trend of increasing profitability for investors over the past decade. The Bitcoin price experienced a slight decline following the news of Changpeng Zhao (CZ) stepping down as Binance’s CEO but has since recovered.
Hot Take: Factors Affecting Bitcoin Rally
Based on on-chain data, the latest Bitcoin rally may be reaching an overheated and euphoric stage, signaling potentially high levels of investor profitability. However, external factors such as leadership changes in major cryptocurrency exchanges can still influence market fluctuations, as seen with the recent Bitcoin price movement after the news of CZ’s resignation. It’s important to consider both on-chain indicators and external news in understanding the current state of the cryptocurrency market.
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