The Euphoria Zone
Welcome back to the euphoria zone, as Bitcoin cracks to a new ATH, and enters price discovery. As expected, the leverage is starting to pile up, which should make for some exciting price action ahead!
G’day Folks,
There is something special about days when Bitcoin punches to new ATHs.
It is a reminder that despite all the people telling us we’re wrong for years, it turns out our convictions were very right all along.
Being a Bitcoiner can be a lonely journey in this respect, as we often go against the grain, and think about the world in a very different way to our friends, family, and certainly the rest of the public.
There is nothing particularly special about this ATH relative to the others, although there is something satisfying about watching Bitcoin trade at $111k USD.
Down Under, the number is getting very large, with one unit of BTC currently going for ONE HUNDRED AND SEVENTY ONE THOUSAND PACIFIC PESOS (Aussie Dingo Dollars).
This is now the third major ATH break of the 2023-24 cycle, and generally speaking, I still believe this ‘cycle’ has more in common with the 2016-17 cycle than any other (which is wild considering Bitcoin is 100x larger now).
We have a more spot driven market structure compared to the 2020-21 bull cycle, which is a healthier state of play.
Given we’re now back into the Euphoria Zone of price discovery, today’s post will be an all around healthy check on the market, looking at:
Onchain dynamics, focused on profit taking sell-side.
ETF flows and volume as a read on demand flows.
Signs of excessive leverage creeping into the market, which amplifies volatility.
The Euphoria Zone: The phase of a Bitcoin bull market where we punch consistent new ATHs, and investor sentiment rips to new altitudes. MVRV trades at high levels (statistically speaking), signalling the average Bitcoin is sitting on a very healthy unrealised profit.
Ironically, this period is both the most exciting, and most bullish, but starts to become increasingly risky for buyers the longer the Euphoria Zone goes on.
As investor confidence grows that this bull is bulletproof, they start to pile on ever increasing leverage, seeking to juice their returns…which ultimately creates the very conditions which will slay the bull…eventually.
📈 Reminder: you can find the charts from our articles on the Checkonchain Charting Website, and a guide in our Charts Tutorial Video.
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