Bitcoin NUPL Shows Average Holder Back In Profit, But For How Long?


On-chain data shows that the Bitcoin NUPL metric has returned to a positive value, indicating that the market as a whole is back in profit.

Bitcoin NUPL recent trend could indicate bottom is already in place

As one analyst pointed out in a CryptoQuant post, a BTC NUPL breakout above the neutral market could be a sign that a bottom has begun.

The “net unrealized profit/loss(or “NUPL” for short) is an index that is defined as the difference between the market and the maximum achieved, divided by the market capitalization of the market.

In simpler terms, what this metric tells us is the profit/loss ratio among investors in the current Bitcoin market.

The indicator works by looking at the chain history of each coin to see what price it was last moved at. If the selling price of any coin is lower than the current value of BTC, then that particular coin holds some profit for the time being. Otherwise, it is at a loss right now.

Related reading | Surrender: Public Bitcoin miners dump 25% of their Bitcoin holdings in the past month

When the value of NUPL is greater than zero, this means that investors in the Bitcoin market as a whole are profitable. On the other hand, a negative index value indicates that the market as a whole is currently losing ground.

Now, here is a chart showing the trend in BTC NUPL over the past several years:

Bitcoin NUPL

The value of the metric seems to have surged up in recent days | Source: CryptoQuant

As you can see in the above chart, Quantum has identified the relevant areas for the Bitcoin NUPL bear market trend.

It appears that after some time from the deep drop below zero, the rebound to positive values ​​was a sign of a bottom formation during the previous bear markets.

Currently, the indicator is back to the positive value after noticing the rise recently. This means that investors as a whole are making small profits at the moment.

If anything goes through the past cycles, this trend might indicate lower This Bitcoin bear market has already been entered.

However, as is evident in the graph, breaking the green NUPL values ​​does not necessarily mean the end of the bear. He just pointed out that the cryptocurrency has already faced the worst.

Related reading | Tesla destroys the bitcoin rally? Musk sold 75% of BTC

Previous bear markets have lasted much longer than the current market, so it is possible that if a similar pattern follows, the market may fall back into a loss and move sideways for a while, before appropriate bullish momentum builds up.

BTC price

At the time of writing this report, Bitcoin price It is floating around $22.6K, up 10% in the last week.

Bitcoin price chart

BTC has slumped down during the last 24 hours | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com



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