The ongoing bullish momentum has brought Bitcoin dangerously close to the euphoria zone, as on-chain data shows over 85% of all holders are currently in profit.
This historically significant milestone is sparking speculation about whether the top for this market cycle is near, especially as technical and behavioral signals begin to flash warnings of potential short-term corrections.
According to a recent CryptoQuant analysis by contributor Darkfost, Bitcoin’s “supply in profit” metric — a key on-chain indicator measuring the percentage of BTC holders above their cost basis — has surged past 85%, recovering from a previous dip to 75% during the last correction.
Source: CryptoQuantWhile rising profit levels typically signal a strong uptrend, they also edge the market closer to euphoric sentiment, which in past cycles has consistently preceded notable pullbacks.
“Having a large portion of supply in profit is not a bad thing,” Darkfost noted. “It tends to support bullish trends — until it reaches euphoric levels.”
Historically, a 90% threshold in this metric has marked periods of peak optimism, shortly followed by corrections.
During bear markets, by contrast, supply in profit can fall to the 45–50% range, which has previously signaled deep capitulation and long-term buying opportunities.
On-Chain Activity: Demand and Volatility Paint a Mixed Picture
Beyond price and profit levels, blockchain activity and derivatives market data are sending conflicting signals about Bitcoin’s short-term direction.
One positive development is the uptick in Daily Active Addresses. According to IntoTheBlock, the number of unique active Bitcoin addresses has surpassed 800,000, indicating an increase in user engagement on the network.
Historically, spikes in active addresses have coincided with periods of heightened volatility or bullish momentum, as more participants enter the market to capitalize on price movements.
While the increase is notable, it’s worth tempering expectations. The 800,000 figure still falls short of the 900,000 peak in 2023 and lags well behind the 1.2 million addresses seen during the 2021 and 2017 bull markets.
This suggests that, despite recent gains, Bitcoin has yet to achieve the level of mainstream attention or user engagement seen during previous euphoric runs.
Meanwhile, options market data indicate an increase in open interest, suggesting a new wave of speculative activity is underway.
According to Coinglass, BTC open interest rose by $1 billion between April 28 and April 30, while ETH OI saw a $150 million boost.
Source: CoinGlassImplied volatility (IV) for both assets has dropped, signaling a cooling market. Bitcoin’s 7-day IV dropped from 53% to 38%, and its 30-day IV declined to 43%.
This lower volatility hasn’t dampened bullish sentiment across some trading platforms.
On Derive.xyz, 73% of BTC options premiums are being used to buy calls, and the ratio of calls to puts is 3:1. ETH traders are even more aggressive, with 81.8% of premiums targeting calls, and a 4:1 call-to-put ratio.
Demand Momentum Still Negative Despite Price Gains
Despite the surge in price and bullish institutional inflows, another critical metric is flashing a warning sign. Bitcoin’s 30-day Demand Momentum remains deeply negative, signaling a persistent lack of strong demand from short-term holders.
According to CryptoQuant analyst Crazzyblockk, the current 30-day Demand Momentum stands at -483,860 BTC, while its 30-day Simple Moving Average is hovering around -310,700 BTC.
This metric is calculated by subtracting the long-term holder supply from the short-term holder supply over a 30-day period.
When the value is negative, it means long-term holders are accumulating less BTC than short-term holders are distributing, a pattern typically seen in late-cycle distribution phases.
This suggests that much of the recent buying is not coming from investors with long-term conviction but rather from traders looking to capitalize on short-term gains.
Such dynamics have historically preceded price retracements, as seen in mid-2021 and Q2 2022, both of which were followed by sharp downturns.
However, these negative divergences have also historically marked market bottoms and set the stage for subsequent rallies.
Bitcoin is currently consolidating between $94,000 and $95,000, with key resistance at $98,000 and support near the $85,000–$87,000 range. Technical signals are mixed.
The Relative Strength Index (RSI) at 67 hints at near-overbought conditions, while the Stochastic RSI shows signs of trend fatigue. However, bullish signals persist in the momentum and MACD readings.
While the market appears structurally strong due to institutional backing, the lack of retail conviction and tepid user engagement could hinder Bitcoin from achieving another leg up without further consolidation or correction.
Ultimately, the next few weeks could prove pivotal. Should supply in profit surpass the euphoric 90% mark and active addresses continue to rise, Bitcoin might well break through the $100,000 barrier.
However, if short-term holders continue to dominate and demand momentum remains negative, a near-term top may be around the corner.
The post Over 85% of Bitcoin Holders in Profit as BTC Nears Euphoria Zone — Is a Price Top Imminent? appeared first on Cryptonews.
