Has Bitcoin Hit Bottom Yet? Here’s What On-Chain Data Says

Bitcoin continued to crash down yesterday, with the coin hitting as little as $21k earlier than rebounding to present values. Has the crypto made the underside but?

Bitcoin NUPL Indicator Assumes Unfavourable Values For First Time Since 2020

As identified by an analyst in a CryptoQuant put up, the NUPL metric has declined beneath zero, which could possibly be an indication that the crypto could also be approaching a backside.

The Bitcoin “web unrealized revenue and loss” (NUPL) is an indicator that’s outlined because the distinction between the market cap and the realized cap, divided by the market cap.

In easier phrases, what this metric tells us is whether or not the general market is at the moment holding an unrealized revenue or a loss.

When the NUPL’s worth is larger than zero, it means the traders as an entire are in a state of revenue in the mean time.

Alternatively, values of the metric lower than zero suggest the Bitcoin market as an entire is now holding an unrealized loss.

Now, here’s a chart that reveals the development within the BTC NUPL over the previous couple of years:

The worth of the indicator appears to have plunged down just lately | Supply: CryptoQuant

As you’ll be able to see within the above graph, the Bitcoin NUPL has sharply decreased in worth over the previous couple of days as the value of the crypto has noticed a crash.

The indicator now has a unfavorable worth, suggesting that the general BTC market is now holding some unrealized loss.

Associated Studying | Bitcoin Lengthy-Time period Holders Understand March 2020-Like Losses As BTC Crashes

The final time the indicator dropped this low was again in March 2020, following the crash brought on by the onset of COVID-19.

Traditionally, Bitcoin has approached a backside every time the NUPL metric has reached a unfavorable worth of round 0.2.

It’s because because the indicator decreases additional in worth, traders begin going deeper into crimson, and the motive to promote begins dying down.

Associated Studying | Bitcoin Weekly RSI Units File For Most Oversold In Historical past, What Comes Subsequent?

Whereas the Bitcoin NUPL has now gone beneath zero, the metric’s worth remains to be bigger than it was throughout the earlier bottoms.

So, if an identical development as these previous situations follows now as effectively, then BTC could have room to say no additional nonetheless earlier than the underside is in.

BTC Value

On the time of writing, Bitcoin’s value floats round $22k, down 33% within the final seven days. Over the previous month, the crypto has misplaced 27% in worth.

The beneath chart reveals the development within the worth of the coin during the last 5 days.

Bitcoin Price Chart

The worth of BTC has crashed down over the previous couple of days | Supply: BTCUSD on TradingView
Featured picture from Unsplash.com, charts from TradingView.com, CryptoQuant.com
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