In this article, Bitcoin Magazine analyzes the on-chain index of Bitcoin (BTC) and Ethereum (ETH), more specifically the Unrealized Net Profit / Loss (NUPL) to find market peak times.
BTC’s NUPL has risen above the benchmark of 0.5 for 11 months. The previous two bull markets ended after the NUPL broke these levels for the first time in 12 months.
NUPL was created to determine the total profit or loss from moving a coin. To determine this, the difference between the current price and the price at the last movement is compensated for for each coin in circulation.
Values above zero indicate that the realized gain is greater than the realized loss, while values below zero indicate the opposite is also the case.
Historically, values above 0.75 indicate a top, while values below 0.25 indicate a low.
The annual high of the NUPL BTC is 0.748 and was reached on February 21st. As a result, it failed to break above the 0.75 high that has occurred in all previous bull markets.
The 2021 performance is very interesting as the NUPL slipped below 0.5 (yellow) before turning up again and turning green.
This is similar to the 2013 bull market, which was characterized by two peaks with sharp declines in between.
During the two bull runs in 2013 and 2017, the period in which the NUPL stayed above 0.50 by the end of the bull market was about a year.
Should history repeat itself, the current bull market could end in October 2020.
The source: Glass knot
A closer look at performance since July shows that the NUPL fell briefly below 0.5 twice before later regaining it. It is currently at 0.52.
Historically, a drop below 0.5 could mark the end of the bull market.
The source: Glass knot
The annual high of the NUPL ETH is 0.77 and was reached in January. In contrast to BTC, the index has already passed the peak signal level of 0.75.
Similar to BTC, ETH’s bull run in 2017 lasted about a year after NUPL broke the 0.50 threshold. In the case of ETH, however, the decline in the NUPL below 0.50 (black arrow) marked the end of the bull cycle in 2017.
Currently, the bull cycle has lasted a year after NUPL crossed the 0.5 mark for the first time. The move took place in September 2020.
So if the indicator drops below 0.50 in the near future, the ETH bull cycle will be over.
The source: Glass knot
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