Bitcoin Market Entering “Euphoria Zone” As Speculators Take Over, Say On-Chain Analysts
Bitcoin (BTC) is re-entering a bull market “euphoria” zone highly reminiscent of the asset’s strongest historical price runs, according to a report by on-chain analysts at Glassnode published Tuesday.
After convincingly breaking above $70,000 earlier this week, investors’ on-chain behavior looks very similar to when Bitcoin broke all-time highs in years past, the report notes.
One example is found in Bitcoin’s “realized cap” – the total value of all bitcoins put together based on the price that each coin was last transacted at.
The metric is now at an all-time high of $504 billion, and increasing at a rate of $54 billion per month. That means massive amounts of new capital are entering the space, at a pace reminiscent of early 2021.
Another similarity: coins are rapidly changing hands from long-term HODLers to short-term speculators.
“Investors who accumulated BTC at cheaper prices several months to years in the past, tend to accelerate their distribution pressure as new ATHs are reached,” wrote Glassnode in its weekly report. “This wealth transfer is once again in play, with the proportion of wealth held by ‘Young coins’ (moved within the last 3-months), increasing by 138% since October 2023.”
From its all-time high in November 2023, the BTC supply held by long-term holders has fallen by 660,000 coins. Meanwhile, short-term holder supply has risen by 810,000 coins, gaining from both long-term holders and exchange balances.
Furthermore, as long-term holders rotate out of their early holdings, the “realized price” is beginning to skyrocket, moving one standard deviation above its long-term mean.
The same pattern of HODLers realizing massive gains is visible in Bitcoin’s spent-output profit ratio (SOPR). The metric shows that
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