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 Destructive Values For First Time Since 2020

As identified by an analyst in a CryptoQuant post, the NUPL metric has declined under zero, which might 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 less complicated phrases, what this metric tells us is whether or not the general market is presently holding an unrealized revenue or a loss.

When the NUPL’s worth is larger than zero, it means the traders as a complete are in a state of revenue in the meanwhile.

Then again, values of the metric lower than zero indicate the Bitcoin market as a complete is now holding an unrealized loss.

Now, here’s a chart that exhibits the pattern 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 possibly can 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 detrimental worth, suggesting that the general BTC market is now holding some unrealized loss.

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

Traditionally, Bitcoin has approached a backside each time the NUPL metric has reached a detrimental 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.

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Whereas the Bitcoin NUPL has now gone under zero, the metric’s worth continues to be bigger than it was through the earlier bottoms.

So, if an analogous pattern as these previous cases follows now as properly, then BTC might have room to say no additional nonetheless earlier than the underside is in.

BTC Value

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

The under chart exhibits the pattern within the worth of the coin during the last 5 days.

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