The supply of Bitcoin in profit continues to steadily increase despite recent setbacks and persistent market challenges.
On-chain data indicates that over 85% of the circulating supply of Bitcoin is currently in profit. This is historically a bullish signal, but often marks the beginning of euphoric phases in market cycles.
Bitcoin enters the bullish zone, but analysts warn of a possible pullback.
The supply of Bitcoin in profit measures the percentage of token holders who bought their assets at prices lower than the current market value. When this metric rises, it indicates broad investor confidence and significant capital inflows into the asset.
In a new report, pseudonymous analyst CryptoQuant Darkfost revealed that over 85% of the circulating supply of Bitcoin is currently held in profit. While this trend is a bullish signal, it has its nuances. According to the analyst's note, the market is now entering the euphoria zone, a phase that occurs when the profit supply approaches or exceeds 90%. These levels, while bullish, often coincide with local market peaks when traders begin to take profits, leading to short-term to mid-term corrections.
Historically, when the profit supply exceeds the 90% threshold, it consistently triggers euphoric phases, and we are now approaching this level. However, these euphoric phases can be short-lived and are often accompanied by short-term to mid-term corrections.
The funding indicator indicates a market in wait mode.
It's important to note that the Bitcoin funding rate remains relatively balanced, indicating that the market is in a state of waiting. At the time of publication, the token's funding rate is 0%. The funding rate is a periodic payment between traders in perpetual futures markets, used to keep contract prices aligned with the spot market. As is the case with Bitcoin, when an asset's funding rate is 0%, it indicates a neutral market sentiment, where neither long nor short positions dominate.
This indicates that Bitcoin investors are waiting for a catalyst that will provide clearer direction. This neutral market sentiment and growing profit supply create conditions for potential price volatility in the near term.
Bitcoin is consistently holding below the resistance level.
At the time of publication, the king of tokens is trading at $95,125, remaining below the key resistance level of $95,971. Despite recent market volatility, demand for Bitcoin among spot market participants remains significant, as reflected in its relative strength index (RSI), which currently stands at 68.21.
The RSI indicator measures overbought and oversold conditions of an asset in the market. It ranges between 0 and 100, with values above 70 indicating that the asset is overbought and may experience a price decline. Conversely, values below 30 indicate that the asset is oversold and a bounce may be observed.
The Bitcoin RSI indicator suggests the possibility of further price increases before the token becomes overbought. If demand strengthens, the token may break above the resistance level of $95,971 and rise to $98,983. However, if bearish sentiment increases, Bitcoin may resume its decline and fall to $91,851.#AbuDhabiStablecoin #BinanceSquare #Write2Earn #Binance #crypto $BTC