Bitcoin (BTC) has further to fall for one of its “cleanest cycle clocks” to signal a bear-market bottom, new analysis says.
Key points:
- One of Bitcoin’s “cleanest cycle clocks” suggests that new macro lows are needed this bear market.
- The NUPL metric is still in positive territory, setting it apart from previous bear markets.
- Analysis expects history to repeat with a higher low on a long-term NUPL moving average.
CryptoQuant: Bitcoin NUPL contains “level to watch”
In research published on Monday, onchain analytics platform CryptoQuant flagged an incoming profitability floor for the BTC supply.
The onchain metric involved was Net Unrealized Profit/Loss (NUPL), which measures the portion of the supply being held at a higher or lower price versus that at which it last moved. Its score is currently 0.158, a level last seen in early 2023.
“Smoothed into its 30 and 100-day exponential moving averages (EMAs), it becomes one of the cleanest cycle clocks on-chain,” contributor TheChessOnChain commented.
An accompanying chart shows the 100-day EMA of NUPL slowly trending toward cycle bottom levels below zero.
“Every time the 100-day EMA of NUPL fell below zero, Bitcoin was carving its cycle bottom: late 2011 (low near $2), January 2015 ($182), the 2018 bear ($3,206 in December 2018), and the 2022 FTX bottom ($15,792 in November 2022),” TheChessOnChain noted.
Bitcoin NUPL data (screenshot). Source: CryptoQuant
At just above $60,000, BTC/USD corresponds to an NUPL 100-day EMA of 0.215, signalling plenty of room left to drop in order to match previous bear-market lows.
CryptoQuant acknowledged that NUPL has put in higher lows throughout Bitcoin’s history, meaning that even a trip below the zero line may not be essential.
“That leaves two paths,” it continued, describing the four extant zero-line crosses as a “pattern, not a law.”
“Either the 100-day EMA crosses zero as it did at every prior bottom, or this becomes the first cycle to bottom without it, which would fit the shallower-each-time trend.”
No time frame was given for when the next bottom could occur, with CryptoQuant specifying the zero line as the “level to watch in the coming weeks.”
Bear market reversal signals copy history
As Cointelegraph reported, multiple bear-market reversal signals have come from onchain sources in recent weeks, echoing 2022.
Related: $60.4K Becomes ‘most important area’: Five things to know in Bitcoin this week
Despite these now locking in, market participants broadly expect new macro lows to enter before bulls regain the upper hand.
Last week, fellow CryptoQuant contributor Axel Adler Jr. highlighted other supply data presenting mixed signals over short and mid-term BTC price action. Supply in loss, Adler calculated, could still be two months off levels that traditionally correspond to the end of Bitcoin bear markets.
“Until then, it is more accurate to treat capitulation as a process rather than a completed fact,” he wrote.
