With continuous bullish momentum, Bitcoin is dangerously close to the euphoria zone, and according to on-chain data, over 85% of total holders are currently in a profitable state.
According to Crypto News on the 30th (local time), this historically significant milestone is raising speculation about whether the peak of this market cycle is near, especially as technical and behavioral signals begin to warn of potential short-term correction possibilities.
According to a recent analysis by CryptoQuant contributor Darkfost, Bitcoin's 'Profitable Supply' indicator has exceeded 85%, recovering from a level that dropped to 75% during the last correction. This indicator is a key on-chain metric that measures the percentage of Bitcoin holders above their purchase cost.
The rise in profitability generally indicates a strong upward trend, but simultaneously brings the market closer to the euphoric atmosphere typically preceding notable corrections in past cycles.
Darkfost mentioned, "Having a large portion of supply in profit is not a bad thing. It tends to support the bullish trend until it reaches euphoric levels."
Historically, when this indicator reaches the 90% threshold, it marked the peak of optimism, followed soon by a correction. Conversely, during bear markets, profitable supply can drop to the 45-50% range, which previously signaled deep capitulation and long-term buying opportunities.
Blockchain activity and derivatives market data are sending conflicting signals about Bitcoin's short-term direction. One positive development is the increase in daily active addresses. According to IntoTheBlock, the number of unique active Bitcoin addresses has exceeded 800,000, indicating increased user engagement on the network.
Historically, a surge in active addresses has coincided with increased volatility as more participants enter the market to leverage price movements or during bullish momentum periods.
While this increase is noteworthy, expectations need to be moderated. The 800,000 figure still falls short of the 2023 peak of 900,000 and is far behind the 1.2 million addresses seen in the bullish markets of 2021 and 2017. This suggests that despite recent gains, Bitcoin has not yet achieved the level of mainstream interest or user participation observed during previous euphoric trends.
Meanwhile, options market data indicates increased open interest, suggesting ongoing speculative activity. According to Coinglass, Bitcoin's open interest increased by $1 billion between April 28 and April 30, while Ethereum's open interest rose by $150 million.
The implied volatility for both assets has declined, indicating market cooling. Bitcoin's 7-day implied volatility dropped from 53% to 38%, and the 30-day implied volatility decreased to 43%.
This reduced volatility has not dampened the bullish sentiment on some trading platforms. On Derive.xyz, 73% of Bitcoin option premiums are used for call option purchases, with a call-to-put ratio of 3:1. Ethereum traders are even more aggressive, with 81.8% of premiums targeting call options and a call-to-put ratio of 4:1.
Despite price increases and institutional inflows, another critical indicator is sending warning signals. Bitcoin's 30-day demand momentum remains significantly negative, indicating a continued lack of strong demand from short-term holders.
According to CryptoQuant analyst Crazzyblockk, the current 30-day demand momentum is -483,860 BTC, with the 30-day simple moving average hovering around -310,700 BTC. This indicator is calculated by subtracting short-term holder supply from long-term holder supply over a 30-day period.
A negative value means long-term holders are accumulating fewer Bitcoins than short-term holders are distributing, a pattern typically seen in the late distribution phase of a cycle. This suggests that recent buying is not primarily from investors with long-term conviction but from traders seeking short-term gains.
This dynamic has historically preceded price corrections, as seen in mid-2021 and Q2 2022, both followed by sharp declines. However, such negative divergences have also historically marked market bottoms and set the stage for subsequent rallies.
Bitcoin is currently consolidating between $94,000 and $95,000, with major resistance at $98,000 and support in the $85,000 to $87,000 range. Technical signals are mixed. The Relative Strength Index (RSI) at 67 suggests near-overbought conditions, while the Stochastic RSI shows signs of trend fatigue. However, momentum and MACD indicators continue to show bullish signals.
While the market structurally appears strong with institutional support, the lack of retail investor confidence and lukewarm user participation could hinder Bitcoin from achieving another upward stage without further consolidation or correction.
Ultimately, the next few weeks could be crucial. If profitable supply surpasses the euphoric 90% mark and active addresses continue to increase, Bitcoin could break through the $100,000 barrier. However, if short-term holders remain dominant and demand momentum stays negative, it may reach its peak in the near term.
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