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Author: Admin | 2025-04-28
Seep into bitcoin without necessarily triggering a raging bull market, instead leading to an environment of chop and consolidation. This is often characterized by a tug-of-war between marginal buyers and sellers, where price levels witness repeated tests of resistance and support, all while accumulation from HODLers continues under the surface.Second, it shows a historical reality where bitcoin’s true valuation — the price where all its supply has traded hands — surpasses the all-time high long before the media frenzy and new wave of speculative inflows arrive again. One can view this as an ode to the “smart money” investors, who don’t need the explicit signal of a nominal exchange rate all-time high to understand that bitcoin’s fundamentals are stronger than ever.A demonstration of this dynamic is the net realized profits relative to the bitcoin market cap. Following the worst of a bear market capitulation, bitcoin market inflows are distinctly positive (but not yet over zealous) while the exchange rate grinds higher to eventually flirt with price all-time highs. Once the all-time high is broken, inflows ramp up dramatically. The setup for this market cycle is still in the early stages. Unrealized Profit/Loss We’ve examined realized profit and loss cycles, so now let’s turn to the unrealized side of the equation. Relative Unrealized Profit/Loss (NUPL) is an insightful metric designed to gauge investor sentiment in the bitcoin market by calculating the total unrealized gains or losses across the current supply. To calculate the NUPL, subtract the realized cap (which represents the value of each bitcoin when it last moved on the blockchain) from the market cap, then express this difference as a ratio of the market cap. This metric works to standardize the state of the unrealized profits/losses held by investors using the market capitalization to account for an ever changing market valuation. A higher ratio typically suggests a state of greed or speculative froth among investors, indicative of potential market tops or overbuying conditions. In contrast, a lower ratio generally signals an atmosphere of fear or capitulation, potentially pointing to market bottoms or overselling scenarios.In the current climate, NUPL stands at 0.37, a level we can categorize as optimism/anxiety, depending on the trend direction.It’s noteworthy that the bitcoin market has never seen a recovery in NUPL from the capitulation phase to the optimism phase without a subsequent visit to one or both of the two highest tiers of NUPL: belief and euphoria.Translated into simpler terms, this suggests that bitcoin market recoveries, even from the most severe conditions, lead to brighter days ahead due to the resilience of the bitcoin HODLer base and a consistent transfer of coins from weak hands to strong ones. The ongoing wealth transfer underpins market recoveries,
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