- Bitcoin approaches US$57K amid a market downturn, with the Fear & Greed Index solidly indicating fear, suggesting it may be a buying opportunity.
- CryptoQuant points to the NUPL metric nearing a critical point, historically a pivot for market downturns, potentially leading Bitcoin to fall to US$40K.
- Despite bearish signs, there’s room for recovery, while analysts like van de Poppe forecast a bullish future for altcoins, highlighted by promising chart patterns.
As Bitcoin eyes the US$57K (AU$86.2K) mark and the whole market once again turns red, the Fear & Greed Index remains solidly in Fear territory. For many, Fear or Extreme Fear are the times to buy more of the asset they believe in.
But analysts at CryptoQuant have a metric that might convince buyers to step back for a moment and take stock. They ask if bears are ready to take back control and cite the NUPL metric as an important gauge for market observers.
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NUPL Nears Notable Nexus
NUPL, or Net Unrealised Profit/Loss, is a metric calculated by dividing the difference between Bitcoin’s Market Value (the current price multiplied by the coins in circulation, similar to market cap in traditional markets) and its Realised Value (the average price of each Bitcoin when last moved, multiplied by the total coins in circulation) by the Market Cap.
This formula provides an estimate of total paper profits or losses held by Bitcoin investors, and is particularly valuable for tracking changes in investor sentiment over time.
CryptoQuant writes that the NUPL has now reached a critical point where “Historically, the 0.4 level has served as a significant point of support and resistance”.
They say that usually breaching this level leads to further downtrends, which could eventually allow bears to “take full control of the market”. CryptoQuant forecasts in that scenario BTC could drop to around US$40K (AU$60.4K).
Still, they add that it’s not necessarily a foregone conclusion that the market will turn bearish, leaving room for potential recovery or stabilisation.
However, it’s important to note that the current decline has not yet reached a severity that would definitively indicate the end of the upward trend.
CryptoQuantAnalysts Predict More Pain Before Significant Altcoin Breakout
And other analysts have chimed in with a similar tune, Miles Deutscher recently wrote the next few weeks could get very boring – and others also warn of more short term pain.
Michaël van de Poppe believes however that pain could soon be over, writing on X that “September onwards, it’s again the best period of the cycle for #Bitcoin & #Crypto. BTC valuations are slowly grinding upwards already”.
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Further, van de Poppe is optimistic regarding the potential performance of altcoins. According to him the “TOTAL3/BTC” chart is the only chart to focus on and it’s “absolutely great, with a massive bullish divergence”.
He concludes that altcoins are poised for a “big breakout”, indicating an expectation of significant positive price movement in the near future.
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