Has Bitcoin Hit Bottom Yet? Here’s What On-Chain Data Says
14 Juin 2022 - 9:00PM
NEWSBTC
Bitcoin continued to crash down yesterday, with the coin hitting as
low as $21k before rebounding to current values. Has the crypto
made the bottom yet? Bitcoin NUPL Indicator Assumes Negative Values
For First Time Since 2020 As pointed out by an analyst in a
CryptoQuant post, the NUPL metric has declined below zero, which
could be a sign that the crypto may be approaching a bottom. The
Bitcoin “net unrealized profit and loss” (NUPL) is an indicator
that’s defined as the difference between the market cap and the
realized cap, divided by the market cap. In simpler terms, what
this metric tells us is whether the overall market is currently
holding an unrealized profit or a loss. When the NUPL’s value is
greater than zero, it means the investors as a whole are in a state
of profit at the moment. On the other hand, values of the metric
less than zero imply the Bitcoin market as a whole is now holding
an unrealized loss. Now, here is a chart that shows the trend in
the BTC NUPL over the last few years: The value of the indicator
seems to have plunged down recently | Source: CryptoQuant As you
can see in the above graph, the Bitcoin NUPL has sharply decreased
in value over the past couple of days as the price of the crypto
has observed a crash. The indicator now has a negative value,
suggesting that the overall BTC market is now holding some
unrealized loss. Related Reading | Bitcoin Long-Term Holders
Realize March 2020-Like Losses As BTC Crashes The last time the
indicator dropped this low was back in March 2020, following the
crash caused by the onset of COVID-19. Historically, Bitcoin has
approached a bottom whenever the NUPL metric has reached a negative
value of around 0.2. This is because as the indicator decreases
further in value, investors start going deeper into red, and the
motive to sell starts dying down. Related Reading | Bitcoin
Weekly RSI Sets Record For Most Oversold In History, What Comes
Next? While the Bitcoin NUPL has now gone below zero, the metric’s
value is still larger than it was during the previous bottoms. So,
if a similar trend as those past instances follows now as well,
then BTC may have room to decline further still before the bottom
is in. BTC Price At the time of writing, Bitcoin’s price floats
around $22k, down 33% in the last seven days. Over the past month,
the crypto has lost 27% in value. The below chart shows the trend
in the value of the coin over the last five days. The price of BTC
has crashed down over the last few days | Source: BTCUSD on
TradingView Featured image from Unsplash.com, charts from
TradingView.com, CryptoQuant.com
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