- 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.
Onchain analytics platform CryptoQuant flagged an incoming profitability floor for the Bitcoin supply in research published on Monday. The firm highlighted the Net Unrealized Profit/Loss (NUPL) metric, which measures the portion of the supply being held at a higher or lower price versus its last moved price. Its score currently sits at 0.158, a level last seen in early 2023.
Contributor TheChessOnChain commented that the metric, smoothed into its 30 and 100-day exponential moving averages (EMAs), becomes one of the cleanest cycle clocks on-chain. An accompanying chart shows the 100-day EMA of NUPL slowly trending toward cycle bottom levels below zero. TheChessOnChain noted that every time the 100-day EMA fell below zero, Bitcoin was carving its cycle bottom: late 2011 near $2, January 2015 at $182, the 2018 bear at $3,206, and the 2022 FTX bottom at $15,792.
At just above $60,000, BTC/USD corresponds to an NUPL 100-day EMA of 0.215, signaling plenty of room left to drop to match previous bear-market lows. However, CryptoQuant acknowledged that NUPL has put in higher lows throughout Bitcoin’s history, meaning a trip below the zero line may not be essential. The firm described the four extant zero-line crosses as a “pattern, not a law,” leaving two paths.
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.” Fellow contributor Axel Adler Jr. highlighted that supply in loss could still be two months off levels that traditionally correspond to the end of Bitcoin bear markets, adding that “it is more accurate to treat capitulation as a process rather than a completed fact.”
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