With Bitcoin’s[1] price surging from $37.2K to $46.49K, one section of the market is rejoicing the rally, while the other is skeptical of the same being a pseudo rally. Keeping in mind the crypto market’s general fame for volatility, it’s no shock that the skeptics aren’t very bullish about the recent rally, but do the arguments have a thread of truth to it?
Net profit turns positive
The net unrealized profit/loss (NUPL) finally moved above the 0.5 level (turned green), highlighting the continuation of the bull run. NUPL looks at the difference between the unrealized profit and unrealized loss to determine whether the network as a whole is currently in a state of profit or loss. From May end till August 6, NUPL indicated a total loss for the network as a whole.
The turning green of the NUPL came as a huge relief to the entire network, however, the indicator still read 0.52 at press time. Ideally, the indicator noting a higher value than 0.75 has indicated tops in the past, while values below 0.25 are generally the bottoms. Over the years, it is seen that a NUPL cycle in either of the sections (yellow or green) during a bull rally or bear market, has roughly lasted for a year since 2016.
Source: Glassnode
This bull run, however, lasted just six months but now as the indicator has jumped above the 0.5 level, it highlighted a similar recovery from a short bearish market as seen in October 2012 and July 2013. At that time, the indicator pumped shortly afterward and proceeded to reach a new high of 0.8 by the end of the year. Now if a similar thing happened this time, BTC prices might pump to $60K, or make a new all-time high.
Bears or
