On-chain analysis: NUPL supports continuation of bull market on BTC and ETH

Today’s on-chain analysis provides a look at NUPL – one of the most popular indicators for both Bitcoin (BTC) and Ethereum

(ETH) to understand the current market movements. Sponsored

Net Unrealized Profit/Loss (NUPL) has once again moved above the 0.5 threshold, likely signaling a continuation of the bull market.

NUPL

Table of Contents

for BTC

NUPL is an indicator that is used to calculate profit and loss. For this purpose, it measures the difference between realized gains and losses.

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Values above 0 mean that realized gains

are higher than realized losses, while the opposite is true for values below 0.

Historically, values above

.75 indicate peaks in the market, while values below 0.25 indicate bott

oms.

In our previous

NUPL analysis, we found that the ratio typically stays above 0.5 for about a year before falling and signaling the beginning of a bear market. To be more specific:

Given historical data, one would expect the bull market to end in October 2021.

However, in the current bull market, the index has only held above 0.5 for six months. The subsequent drop from above 0.5 (green) to below 0.5 (yellow) was a bearish signal that previously signaled the beginning of a bear market.

Interestingly, the NUPL has now moved above 0.5 again, as evidenced by the line turning green. Thus, the current readings are similar to those of 2013.

In June 2013, NUPL fell below 0.5, potentially signaling the beginning of a bear market. However, a rise soon followed and the index moved towards new highs at 0.838 near the end of the year. This was also coupled with a new all-time high in the BTC price.

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If the same were to happen again, it would mean that the BTC price

will continue to rise for about four more months before the bear market finally begins. On-chain analysis: NUPL supports continuation of bull market on BTC and ETHWykres NUPL dla BitcoinChart courtesy of Glassnode

The same can be seen by looking at NUPL customized to users (entity-adjus

ted), which just moved above 0.5. This was pointed out by on-chain analyst @mskvsk. On-chain analysis: NUPL supports continuation of bull market on BTC and ETHOn-chain analysis: NUPL supports continuation of bull market on BTC and ETHSource: Twitter

Ethereum

NUPL for ETH has fallen below 0.5 twice, both times indicating the start of a bear market (black arrows).

Although this allegedly happened last month, it immediately bounced back up above 0.5 (green arrows). Therefore, this reading may indicate a bounce from support as the current value is 0.67.

Thus, also the NUPL reading for ETH does not indicate that Ethereum is in a bear market.

On-chain analysis: NUPL supports continuation of bull market on BTC and ETHNUPL dla ETHChart courtesy of Glassnode

For the latest analysis of Bitcoin (BTC) by BeInCrypto, click here.

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