Bitcoin’s gradual recovery continues. At the time this article was written, it is currently trading at $94,000. This upward trend continues a recent correction That pushed the prices lower earlier this month. Bitcoin’s price remains 12.7% under its previous high, set in January.
On-chain metrics show significant shifts in the market’s behavior, which may affect short- and medium-term sentiment. Recent key developments highlighted Bitcoin’s current profit is a rising portion of its supply.
Analysts suggest that this market trend could support the economy. continued bullish movementBecause market participants will be deciding when to lock gains, volatility could increase.
Leverage and RSI behaviour, as well as the shift in profitability levels are also evaluated along with other indicators.
The Bitcoin supply in profit is nearing euphoria levels
Darkfost, a CryptoQuant Analyst shared his recent view on Bitcoin’s dynamics on the chain. He highlighted the behaviour of the Bitcoin network. “supply in profit” metric.
The analyst claims that the supply of profit (the percentage of Bitcoins in circulation worth more than their purchase price) has returned to above 85%. This number fell from around 85% during the last correction But has now recovered along with recent price recovery.
In past cycles, supply-side profit levels exceeding 90% were associated with periods of euphoria. Although this level has not yet been reached in the current cycles, upward trajectory It is possible that it could be near.
Darkfost observed that similar phases tend to trigger price rallies. However, they can also precede short to mid-term corrections. Analysts emphasized the shift in sentiment from recent lows.
It’s also worth noting that during past cycles, the lowest supply in profit levels were around 45–50%, which corresponded to deep bear market conditions.
This metric is particularly important in the context of predicting potential trend reversals, or times of high volatility.
The Leverage Ratio (RSI) and the RSI indicate reduced market aggression
Crypto Lion is another CryptoQuant Analyst who has written a post. addressed The behavior of leverage ratio data in conjunction with the relative strength index (RSI).
The analyst referred a CryptoQuant custom metric that multiplies RSI times a ratio of open interest to reserve. This method is used to determine the speculative position of a market.
Crypto Lion has observed that RSI is currently more volatile than it was during the summer of 2021. However, leverage dynamics show that this may be due to the recent increase in volatility. market is not currently as overheated.
The post suggests that the market is slowly moving away from leveraged trading, possibly signaling an organic shift towards spot-driven movements. The analyst concluded by saying:
It isn’t surprising that I worry about the future, regardless of whether or not the initial indicator showed a decline.
Chart created by TradingView, DALLE.
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Source: www.newsbtc.com
