Net Unrealized Profit/Loss (NUPL)
A recent analysis has identified a pattern in Bitcoin’s NUPL indicator that suggests the bull market may be coming to an end. NUPL measures the overall profit or loss held by Bitcoin investors.
Overheated Levels
For several weeks, Bitcoin’s NUPL has been at very high levels, indicating that investors are holding significant unrealized profits. Historically, the asset has rarely sustained above this threshold for long periods.
Historical Pattern
In the past, when NUPL has crossed the 0.6 level, it has often signaled a market top. The only exceptions were the bull runs of 2017 and early 2021.
Overbought Zone
The analyst notes that Bitcoin has been in the “overbought” zone for three weeks, which has historically preceded a significant price correction within 3-6 weeks.
Sell-Offs
Investors with high profits are more likely to sell their coins, leading to selloffs at high NUPL values.
Current Market
At the time of writing, Bitcoin is trading around $63,000, down 12% over the past week. This recent price drop may be the start of the predicted correction.
