Bitcoin NUPL Suggests Bear Market Yet To Hit In Full Swing
21 Marzo 2022 - 1:00PM
NEWSBTC
On-chain data shows the Bitcoin NUPL metric currently has values
that would suggest the bear market is yet to hit in full swing, if
the coin is in one. Bitcoin NUPL Value Still Not As Low As Previous
Bear Markets As pointed out by an analyst in a CryptoQuant post,
the BTC NUPL metric suggests market hasn’t neared a bear market
bottom yet. The “net unrealized profile/loss” (or NUPL in short) is
an indicator that tells us about the ratio of profit and loss in
the Bitcoin market. The metric’s value is calculated by taking the
difference between the market cap and the realized cap, and
dividing it by the market cap. When the NUPL has a value greater
than zero, it means there are more coins in profit than ones in
loss at the moment. On the other hand, negative values of the
indicator imply that investors are, on average, in a state of loss
right now. Related Reading | Bitcoin Bullish Signal: Exchange
Reserve Loses Another 50k BTC Over Past Week Now, here is a chart
that shows the trend in the Bitcoin NUPL over the history of the
crypto: Looks like the value of the indicator is still above zero |
Source: CryptoQuant As you can see in the above graph, the Bitcoin
NUPL metric has often been able to predict top and bottom
formations through its various colored zones. In the previous bear
markets, the indicator’s value has usually fallen off below zero
(blue) as a bottom approached. In the lead up to these bearish
periods have been the yellow and green phases, but currently the
NUPL still looks to be in the yellow zone. This may mean that if
Bitcoin has already entered into a bear market, it has still some
ways to go before total capitulation and bottom formation. Related
Reading | What’s Bitcoin Role After End of Petrodollar System?
Arthur Hayes Says However, it’s worth noting that there have been
instances before where the indicator dropped into the yellow zone
after a bull rally, but then jumped back up soon after as the
bullish trend continued, indicating a mid-cycle bottom formation
instead. The latest example of this was during the mini-bear period
of May-July 2021, where the coin bottomed at around $28k and
rallied on to a new ATH. BTC Price At the time of writing,
Bitcoin’s price floats around $41.4k, up 6% in the past week. Over
the last month, the crypto has gained 8% in value. The below chart
shows the trend in the price of the coin over the past five days.
The price of the crypto seems to have held above $40k over the past
couple of days | Source: BTCUSD on TradingView Featured image from
Unsplash.com, charts from TradingView.com, CryptoQuant.com
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