Bitcoin continues its gradual recovery and currently acts above the level of $ 94,000 at the time of writing. This upward trend follows a recent correction that pushed the prices earlier this month. Despite the recent profits, Bitcoin remains around 12.7% below the highest set of all time in January.
While investors monitor the price resistance levels around the psychological $ 100,000 mark, on-chain statistics are starting to show significant changes in market behavior that can influence sentiment in the short and medium term. An important development recently marked is the increasing share of the Bitcoin offer that currently has a profit.
As the market gets closer to historical euphoria thresholds, some analysts suggest that although this trend can support the continuous bullish movement, it could also introduce volatility while market participants assess when they have to lock profit.
The shift of the profitability levels is also evaluated in addition to other indicators such as Leverage and RSI behavior, which offer mixed signals.
Bitcoin supply in profit is approaching the euphoria levels
Cryptoquant analyst Darkfost shared a recent prospect of Bitcoin’s dynamics, with the emphasis on the behavior of the “delivery in profit” metric.
According to the analyst, the profit authority is, which means that the percentage of Bitcoin in circulation is currently higher than the purchase price, rise back above 85%. This statistics fell to around 75% during the last correction, but has now been restored in accordance with the recent price rebound.
Historically, the supply in profit levels above 90% coincided with euphoric phases in earlier market cycles. Although this level still has to be achieved in the current cycle, the upward process that can be approached.
Darkfost noted that such phases often activate accelerated price rallies, but also tend to precede short to medium -term pullbacks. The analyst emphasized how far the sentiment has shifted from recent lows:
It is also worth noting that the lowest offer in profit levels during the past was around 45-50%, which corresponded to the deep bear market conditions.
In this context in particular, monitoring this statistics can be important for anticipating potential trends or periods of increased volatility.
Lever ratio and RSI indicate a reduced aggression of the market
In a separate message, another cryptoquant analyst, crypto lion, addressed The behavior of the lever ratio in combination with relative strengths index data (RSI) data.
The analyst referred to an adapted metriek developed by cryptoquant who multiplies RSI with an open interest-reserve ratio. This approach was designed to assess speculative positioning on the market.
Crypto Lion noted that RSI swings are currently higher than during the summer period of 2021, although the lever dynamics suggest that the market is currently not so overheated.
According to the post, the market seems to be slowly disconnecting from aggressive leverage, which may indicate a shift to more organic spot-driven movement. The analyst concluded:
I am worried about what will happen after the next High, whether the original indicator decreased or not, which is not surprising.
Featured image made with Dall-e, graph of TradingView