On-chain data shows Bitcoin has been going through a “euphoria wave” for two months. Here’s how long it was in this phase during the last bull run.

According to the latest weekly report from the on-chain analytics firm Glassnode, the current BTC cycle is similar to the last one regarding the “Supply Profitability State.”

This indicator is based on the “Percent Supply in Profit,” which keeps track of the percentage of the total circulating Bitcoin supply that’s currently carrying a profit.

This metric works by going through the on-chain history of each coin in circulation to see the price at which it was last transferred. Assuming that this last transaction was the last point at which it changed hands, the price at its time would reflect the coin’s current cost basis.

Naturally, if this cost basis is lower in value than the current spot price of the cryptocurrency, then the coin in question carries some net unrealized gain. The Percent Supply in Profit adds up all such coins and calculates what percentage of the supply they make up for.

The supply Profitability State signals BTC’s current phase based on the market’s profitability status. The chart below shows the trend in this indicator over the past few years.

In the chart, the analytics firm has highlighted three important lines for the Bitcoin Percent Supply in Profit. The middle line (colored in blue) represents the cumulative mean of the metric, while the other two signify +1 (green) and -1 (red) standard deviation (SD) from this mean.

When the Bitcoin Percent Supply in Profit is above the +1SD (approximately 95% of the supply being in the green), the market may be considered to be in the euphoria or pre-euphoria phase.

Similarly, the Supply Profitability State would indicate a bottom discovery phase for values less than -1SD. The zone between these two corresponds to the “bear/bull transition” phase.

From the chart, it’s visible that during the last bull run, Bitcoin first saw a 1.5-month-long pre-euphoria wave, during which the metric tested the +1SD line. The asset followed up with a period of decline and consolidation, which put the Supply In Profit back under the +1 SD mark.

Finally, the coin observed a sharp rally, broke past the +1SD barrier, and went on to achieve new all-time highs, which naturally set the Supply In Profit to 100%.

Bitcoin seems to have witnessed a similar pattern this time around. A two-month-long pre-euphoria phase was followed by a drawdown, which has now been succeeded by a two-month-long euphoria wave during which the cryptocurrency has achieved new records.

If the euphoria wave lasts for a period similar to the last bull run, then four or more months might still be left for this Bitcoin bull rally.

Bitcoin had recovered above $72,000 earlier, but it appears that the asset has retraced back towards the $69,400 level.

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