The Bitcoin NUPL index is receiving negative values for the first time since 2020
As pointed out by an analyst in a CryptoQuant post, the NUPL measurement has dropped below zero, which could be a sign that encryption may be approaching the bottom. Bitcoin “Net Profit and Loss” (NUPL) is an indicator defined as the difference between the market capitalization and the realized ceiling, divided by the market ceiling. In simpler terms, what this measurement tells us is whether the overall market currently retains unrealized gains or losses. When the value of the NUPL is greater than zero, it means that the investors as a whole are in a profit position right now. On the other hand, measurement values below zero indicate that the Bitcoin market as a whole is now experiencing an unrealized loss. Now, here is a chart showing the trend in BTC NUPL in recent years: The value of the index seems to have fallen recently Source: CryptoQuant As you can see in the chart above, Bitcoin NUPL has fallen sharply in value in the last two days as the price of the cryptocurrency has seen a collapse. The index is now negative, indicating that the overall BTC market is now experiencing some unrealized losses. Related reading Long-term Bitcoin holders realize March 2020-like losses as BTC collapses The last time the index fell so low was in March 2020, after the crash caused by the appearance of COVID-19. Historically, Bitcoin was approaching the bottom each time the NUPL measure reached a negative value of about 0.2. This is due to the fact that as the index further declines in value, investors begin to go deeper into the red and the incentive to sell begins to weaken. Related reading Bitcoin Weekly RSI records record for most overselling in history, what follows? While the Bitcoin NUPL has now fallen below zero, the measurement value is still higher than it was at the previous thresholds. So, if a similar trend with those previous cases is followed now, then the BTC may have room to fall even further before the bottom is reached.
BTC price
At the time of writing, the price of Bitcoin is around 22 thousand dollars, down 33% in the last seven days. In the last month, encryption has lost 27% in value. The chart below shows the trend in the value of the currency over the last five days. The price of BTC has collapsed in recent days Source: BTCUSD in TradingView Featured Image by Unsplash.com, Graphs by TradingView.com, CryptoQuant.com
