According to a Glassnode report, Bitcoin has entered a highly profitable “euphoria phase.” Historically, such phases have seen corrections approximately 22 days after they begin. The current phase has already lasted 12 days, suggesting that the risk of a pullback may materialize within 10 days. Additionally, realized profits in November have reached $20.4 billion. If this exceeds the historical peak of $30 billion, it could trigger selling pressure.
(Pre-story: Is $90,000 Not the Top? Glassnode: Bitcoin Profit-Taking Below Previous Peak, Room for Further Gains)
(Background: Inflation Under Control > Bitcoin Surges Past $93,000, Then Plummets $5,000, Over 250,000 Traders Liquidated)
Yesterday (13th), the U.S. released CPI data in line with expectations, adding momentum to the cryptocurrency market. Bitcoin surged to $93,477.11 at one point, rising over $7,000 within the day, but subsequently fell by more than $5,000, leading to the liquidation of over 250,000 traders. Investors are wary of potential market corrections at any time.
On December 12th, the latest report from Glassnode provided clues about the timing of a possible correction. The report noted that Bitcoin has entered a new price discovery phase following new highs, with all circulating supply in a profitable state. Historically, these “euphoria” phases have lasted around 22 days before market corrections, which cause over 5% of the supply to fall back below the original purchase price.
The current rally has maintained this high-profit state for 12 days, highlighting strong market sentiment. However, based on past trends, it also suggests that the market may be approaching a correction period.
The chart below shows the percentage of supply in profit (blue line) and the number of consecutive days each month where over 95% of the supply is in profit (yellow), providing a reference for the timing of market adjustments.
Additionally, Glassnode tallied the cumulative realized profits during this phase to reflect the scale of market gains. The report noted that historically, monthly realized profits in this phase range from $30 billion to $50 billion. As of now, halfway through November, the market has realized $20.4 billion in profits, which, while still below the historical peak, indicates a significant profit scale.
If Bitcoin prices continue to rise, the realized profit scale for November is expected to exceed $30 billion, approaching historical highs. Therefore, monitoring changes in this data can help determine whether a market correction is imminent.
Glassnode uses the short-term holder cost band in the chart below to predict at what level Bitcoin prices might encounter strong profit-taking.
Glassnode explains that during the all-time high (ATH) discovery phase, Bitcoin prices typically approach and test the upper limit (red line) multiple times. This is because new investors enter at higher prices, driving strong demand momentum that pushes prices up. However, if the influx of new funds is insufficient to offset early investors’ profit-taking, prices may correct.
Currently, the upper limit range for Bitcoin is set at $94,900. By observing the distance between the price and these band intervals, especially the upper and middle intervals, one can identify when Bitcoin’s gains are slowing and when selling pressure may increase.
For further reading: Overheating Signal? Robinhood, Coinbase Dominate U.S. App Store Finance Rankings, Google Bitcoin Search Reaches Peak
