NUPL Nears Notable Nexus, Will the Bears Seize Control of the Bitcoin Market?

As Bitcoin eyes the US$57K (AU$86.2K) mark and the whole market once again turns red, the Fear & Greed Index remains solidly in Fear territory.

Bitcoin price dropped sharply on Monday, August 22, and the whole market followed suit. But despite the downturn, an index of market sentiment remained in Fear territory. Usually, times of Fear or Extreme Fear are considered good moments to buy more of an asset.

However, analysts at CryptoQuant have a metric that might convince buyers to pause for a moment and reconsider. They ask if bears are ready to take back control and cite the NUPL metric as an important gauge for market observers.

NUPL Nears Notable Nexus

NUPL, or Net Unrealised Profit/Loss, is a metric calculated by dividing the difference between Bitcoin’s market value (the current price multiplied by the coins in circulation, similar to market cap in traditional markets) and its realised value (the average price of each Bitcoin when last moved, multiplied by the total coins in circulation) by the market cap.

This formula provides an estimate of total paper profits or losses held by Bitcoin investors, and is particularly valuable for tracking changes in investor sentiment over time.

CryptoQuant writes that the NUPL has now reached a critical point where “Historically, the 0.4 level has served as a significant point of support and resistance”.

Will the bears seize control of the market?

“The NUPL metric is currently positioned near a critical level. Historically, the 0.4 level has served as a significant point of support and resistance.” – By @GrizzlyBTClover

Read more ?https://t.co/Q0Nuwu6Xz8 pic.twitter.com/sePvAvWg44

They say that usually breaching this level leads to further downtrends, which could eventually allow bears to “take full control of the market”. CryptoQuant forecasts in that scenario BTC could drop to around $40K.

Still, they add that it’s not necessarily a foregone conclusion that the market will turn bearish, leaving room for potential recovery or stabilisation.

Analysts Predict More Pain Before Significant Altcoin Breakout

Meanwhile, other analysts have expressed similar concerns. Miles Deutscher recently wrote that the next few weeks could be very boring – and others also warn of more short term pain.

Michaël van de Poppe believes however that pain could soon be over, writing on X that “September onwards, it’s again the best period of the cycle for #Bitcoin & #Crypto. BTC valuations are slowly grinding upwards already”.

Related: Aussie Analysts Reveal: How To Identify Crypto Games Worth Investing In

Further, van de Poppe is optimistic regarding the potential performance of altcoins. According to him the “TOTAL3/BTC” chart is the only chart to focus on and it’s “absolutely great, with a massive bullish divergence”.

He concludes that altcoins are primed for a “big breakout”, indicating an expectation of significant positive price movement in the near future.

The only chart to watch.

TOTAL3/BTC looks absolutely great, with a massive bullish divergence.

This indicates that #Altcoins are on edge for a big breakout.

Shoutout @CryptoCapo_.

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