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HomeAnalysisBitcoin (BTC) on-Chain Analysis: Net Unrealized Profit/Loss (NUPL) Becomes Negative for the...

Bitcoin (BTC) on-Chain Analysis: Net Unrealized Profit/Loss (NUPL) Becomes Negative for the First Time Since March 2020

Get used to[in]Crypto looks at Bitcoin (BTC) on-chain indicators, more specifically Net Realized Profit / Loss (NUPL) indicators. This is done to determine if BTC has bottomed out or is in the midst of a long-term bear market.


NUPL is an on-chain indicator of whether a market is in a profit or loss state. It is created by simply dividing the relative unrealized profit by the relative unrealized loss.

A negative value indicates that the market is in a loss state, and a positive value indicates that the market is in a profit state.

Loss condition means that if all coins purchased at a price higher than the current market price are sold, they will be more valuable than all coins purchased at a price lower than the current market price. To do.

Historically, the top of the market cycle has reached above or near 0.75 (blue) and the bottom has reached below 0 (red).

Current breakdown

The BTC market cycle and NUPL have an interesting relationship with the latter movement above and below the 0.5 line. After a sustained uptrend, a cross of less than 0.5 (black circles) indicates that a new bear market cycle has begun.

However, you may need two crosses to start the downtrend.

NUPL fell below 0.5 for the second time in January 2022 and has fallen sharply since then.

NUPL chart by Glassnode

Negative NUPL

In the previous two market cycles, when NUPL fell below 0.5, it bounced sharply (black circle). This was the result of the last bailout rally before the next decline.

That was not the case with the current breakdown (blue circle). When the indicator fell below 0.25, it continued to decline, dropping to -0.06 on June 19. This is the same level reached in March 2020 (red circle). It also brought record lows for net realized profit / loss indicators.

When will BTC bottom out?

The bottoms of the previous two market cycles (black circles) reached -0.56 and -0.36, respectively. Compared to them, current reading still has a lot of room to fall. But it’s worth mentioning that NUPL reached the bottom of 2015 19 days after falling into the negative territory. Similarly, it reached the bottom of 2018 24 days after such a decline occurred. Therefore, even if this is the case, the absolute bottom will soon be expected.

However, if this is not absolute and is a local bottom as in March 2020, BTC may have already bottomed out and continue to increase towards new highs.

In any case, at least the possibility of a relief rally seems high.

for[in]Crypto’s latest Bitcoin (BTC) analysis, click here


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