Bitcoin Short Term NUPL Value Turns Negative, What This Means For Price

Crypto
analyst
Onchained
recently
provided
valuable
insights
into
an


important
metric

that
can
be
used
to
gauge


the
future
trajectory
of
Bitcoin.
The
analyst
suggested
there
was
no
cause
to
worry
at
the
moment
but
highlighted
what
to
watch
out
for
to
know
the
right
time
to
exit
the
market. 

Bitcoin
Short-Term
Holders
NUPL
Turns
Negative

In
a
blog


post,
the
analyst
noted
that
the
NUPL
(Net
Unrealized
Profit/Loss)
for
Bitcoin’s


short-term
holders

recently
turned
negative.
The
analyst
added
that
this
signals
fear
among
this
category
of
investors,
which
is
very
much
likely
given
Bitcoin’s
current
price
action.
The
last
time
this
trend
occurred
was
shortly
after
the


Spot
Bitcoin
ETFs
were
approved,
with
Bitcoin
dropping
from
$49,000
to
$38,000
following
that
occurrence. 

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Source: CryptoQuant

While
the
short-term
holders’
NUPL
turning
red
again
suggests
that
a
significant
price
decline
may
be
on
the
horizon,
the
analyst
remarked
that
this
price
level
may
simply
represent
a
significant
support
line.
The
real
cause
for
concern
might
be
when
the


NUPL
for
mid-term
holders

also
turns
negative.
“It
could
indicate
widespread
market
fear
and
serve
as
a
crucial
risk
management
indicator
for
exiting
the
market,”
the
analyst
claimed. 

It
is
worth
noting
that
the
short-term
holder’s
NUPL
being
negative
means
they
are
currently
seeing
an
unrealized
loss
in
their
investments.
This
could
trigger
a
wave
of
sell-offs
among
these
investors,
mainly
because
of
fear
that


Bitcoin’s
price
could
further
dip.
However,
based
on
the
analyst’s
analysis,
this
might
not
significantly
lower
Bitcoin’s
price. 

Instead,
market
speculators
should
be
more
worried
about
the
PUNL
of
mid-term
holders
(those
who
have
been
holding
Bitcoin
for
3
to
6
months).
The
PUNL
also
turning
negative
will
“suggest
widespread
pessimism
or
negative
sentiment.”
This
could
lead
to


massive
selling
pressure

on
Bitcoin’s
price
as
this
category
of
investors
might
also
offload
their
holdings
out
of
fear.  

The
Worst
May
Already
Be
Over

Crypto
analyst
Ali
Martinez
had


previously
shared

a
similar
analysis
to
Onchained’s,
noting
that
Bitcoin
short-term
holder’s
(STH)
realized
price
was
at
$59,800.
The
analyst
warned
back
then
that
Bitcoin
dropping
below
this
level
could
trigger
“notable
Bitcoin
price
corrections.”
Following
his
prediction,


Bitcoin
fell
below
$59,800,
dropping
to
as
low
as
$57,000. 

Related
Reading:

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Analyst
Says
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Price
Will
Drop
To
$2,500,
Here’s
Why

However,
the
flagship
crypto
has
since
then
recovered
nicely
above
$60,000.
Although
Bitcoin
is
still
showing
signs
of
a
bearish
outlook,
its
quick
recovery
above
$60,000
suggests
that
the
worst
might
be
over,
and
all
the
crypto
token
needs
right
now
is
a


catalyst

to
spark
a
continuation
of
its
bull
run. 

Arthur
Hayes,
BitMEX’s
co-founder
and
former
CEO,
also
confirmed
this
belief,
noting
that
Bitcoin
has
already
found
its
local
bottom.
However,
he


predicted

that
Bitcoin
will
likely
have
a
“range-bound
price
action
between
$60,000
and
$70,000
until
August.”

BTC bulls push price above $63,000 | Source: BTCUSD on Tradingview.com

Featured
image
from
Kiplinger,
chart
from
Tradingview.com