On-Chain Analysis: What NUPL Shows About BTC and ETH Bull Markets
In this article, Bitcoin Magazine takes a look at the on-chain indicator of Bitcoin (BTC) and Ethereum (ETH).
The net unrealized profit / loss (NUPL) is analyzed and compared to previous bull cycles to see if the long-term trend is still bullish.
What is NUPL?
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.
Another simple way to calculate the decline is to subtract realized losses from realized gains.
The realized return measures the total value of all coins whose current price is higher than their previous moving price. Realized losses do the same for coins whose current price is lower than their previous movement price.
The difference between these two amounts is NUPL.
BTC
It means the following:
- Values above 0 indicate a position with net profit.
- A value below 0 indicates a position with a net loss.
Historically, values below -0.25 meant surrender, while values above 0.75 indicated “euphoria,” suggesting that a high may be near.
Threshold values above 0.25 mean “optimism” and above 0.5 “confidence”.
BTC’s highest NUPL ever is 0.878 and was hit in 2011. The high of 2021 is 0.738.
If this is the high, it would be the only time in history that the NUPL did not break above 0.75 before the start of a bear market.
The NUPL is now below 0.5 as shown by the yellow line.
Historically, the change from the green to the yellow line marked the beginning of a bear market. The only exception was in July 2013 (black circle) when BTC reversed after two months and hit new all-time highs.
However, during both the 2013 and 2017 bull runs, the NUPL stayed above the 0.50 level for about a year before the bear market began.
Since it rose above 0.5 in October 2020, it has only stayed above 0.5 for six months. According to previous history, the bull market is expected to end in October 2021.
Source: Glass knot
ETH
The highest NUPL value that ETH has ever achieved is 0.934. It was achieved in January 2017.
In contrast to BTC, ETH hit above 0.75 during the current bull run in May 2021. However, it still has to drop below 0.5.
During the 2016 and 2017 rallies, the transition from blue to green and then to yellow (black arrow) marked the beginning of a bear market.
Therefore, the yellowing of the NUPL (<0.5) could indicate that the current bull cycle is over.
Source: Glass knot
Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
SN_Nour
According to Beincrypto
Follow the Youtube Channel | Subscribe to telegram channel | Follow the Facebook page
Author
Ethereum
On-Chain Analysis: What NUPL Shows About BTC and ETH Bull Markets
In this article, Bitcoin Magazine takes a look at the on-chain indicator of Bitcoin (BTC) and Ethereum (ETH).
The net unrealized profit / loss (NUPL) is analyzed and compared to previous bull cycles to see if the long-term trend is still bullish.
What is NUPL?
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.
Another simple way to calculate the decline is to subtract realized losses from realized gains.
The realized return measures the total value of all coins whose current price is higher than their previous moving price. Realized losses do the same for coins whose current price is lower than their previous movement price.
The difference between these two amounts is NUPL.
BTC
It means the following:
- Values above 0 indicate a position with net profit.
- A value below 0 indicates a position with a net loss.
Historically, values below -0.25 meant surrender, while values above 0.75 indicated “euphoria,” suggesting that a high may be near.
Threshold values above 0.25 mean “optimism” and above 0.5 “confidence”.
BTC’s highest NUPL ever is 0.878 and was hit in 2011. The high of 2021 is 0.738.
If this is the high, it would be the only time in history that the NUPL did not break above 0.75 before the start of a bear market.
The NUPL is now below 0.5 as shown by the yellow line.
Historically, the change from the green to the yellow line marked the beginning of a bear market. The only exception was in July 2013 (black circle) when BTC reversed after two months and hit new all-time highs.
However, during both the 2013 and 2017 bull runs, the NUPL stayed above the 0.50 level for about a year before the bear market began.
Since it rose above 0.5 in October 2020, it has only stayed above 0.5 for six months. According to previous history, the bull market is expected to end in October 2021.
Source: Glass knot
ETH
The highest NUPL value that ETH has ever achieved is 0.934. It was achieved in January 2017.
In contrast to BTC, ETH hit above 0.75 during the current bull run in May 2021. However, it still has to drop below 0.5.
During the 2016 and 2017 rallies, the transition from blue to green and then to yellow (black arrow) marked the beginning of a bear market.
Therefore, the yellowing of the NUPL (<0.5) could indicate that the current bull cycle is over.
Source: Glass knot
Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
SN_Nour
According to Beincrypto
Follow the Youtube Channel | Subscribe to telegram channel | Follow the Facebook page
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