A CryptoQuant analyst report indicates Bitcoin may experience further declines based on the Net Unrealized Profit/Loss (NUPL) indicator, which currently stands at 0.158. The analysis points to the 100-day exponential moving average (EMA) remaining above zero as the key factor, as historical Bitcoin cycle bottoms have consistently formed when this metric fell below zero. The report examines four previous market bottoms spanning from 2011 to 2022, noting a pattern of gradually shallower declines with each cycle as the cryptocurrency matures.
Bitcoin NUPL Indicator Registers 0.158 With 30-Day and 100-Day Averages Diverging
The CryptoQuant analyst report details Bitcoin's current NUPL indicator reading at 0.158. The 30-day NUPL moving average has fallen to 0.155, while the 100-day EMA stands at 0.215. The analysis notes that with the 30-day average positioned below the 100-day average, a cycle bottom would require the 100-day EMA to also fall below zero. The 100-day NUPL EMA has not yet fallen below zero, a threshold the analyst identifies as historically significant for bottom formation.
Historical Bitcoin Bottoms Occurred When 100-Day NUPL EMA Fell Below Zero
The analyst report documents four instances when Bitcoin's 100-day NUPL EMA fell below zero, each marking a cycle bottom. The first occurrence happened in late 2011 with Bitcoin trading near $2. The second instance occurred in January 2015 at $182. The third bottom formed during the 2018 bear market, with Bitcoin reaching $3,206 in December 2018. The most recent example occurred at the November 2022 FTX bottom, when Bitcoin traded at $15,792.
The report states: "Every time NUPL's 100-day EMA fell below zero, Bitcoin formed a cycle bottom: late 2011 (low near $2), January 2015 ($182), the 2018 bear market ($3,206 in December 2018), and the 2022 FTX bottom ($15,792 in November 2022)."
Analyst Notes Declining Severity Trend Across Four Bitcoin Market Cycles
The CryptoQuant analyst observes that each NUPL drop has been shallower than the previous cycle. The 2011 cycle recorded a drop of -0.58, followed by -0.22 in 2015, with both 2019 and 2022 registering approximately -0.15. The report attributes this pattern to Bitcoin's maturation, stating: "Each drop in NUPL has been shallower than the last: -0.58 in 2011, -0.22 in 2015, and approximately -0.15 in both 2019 and 2022. This seems consistent with the maturation of BTC."
The analyst notes that the past four cycles formed a pattern but emphasizes this does not constitute certainty. The report concludes that the NUPL indicator has not yet reached its lowest levels from past bear markets. The analyst adds: "Since this cycle tends to gradually reduce the severity of the decline compared to previous cycles, there is also the possibility of forming a bottom without falling to past levels."
FAQ
What is the current Bitcoin NUPL indicator reading according to the CryptoQuant analyst?
The CryptoQuant analyst report states Bitcoin's NUPL indicator currently stands at 0.158, with the 30-day NUPL moving average at 0.155 and the 100-day EMA at 0.215.
When did Bitcoin form cycle bottoms based on the 100-day NUPL EMA falling below zero?
According to the analyst report, Bitcoin formed cycle bottoms when the 100-day NUPL EMA fell below zero in late 2011 (near $2), January 2015 ($182), December 2018 ($3,206), and November 2022 ($15,792).
How have Bitcoin NUPL drops changed across market cycles?
The analyst report documents that NUPL drops have become progressively shallower: -0.58 in 2011, -0.22 in 2015, and approximately -0.15 in both 2019 and 2022, which the analyst attributes to Bitcoin's maturation.
