The first cryptocurrency market is once again at a crossroads. My analysis shows that the Net Unrealized Profit/Loss (NUPL) metric, smoothed by a 100-day exponential moving average (EMA), is approaching critical levels that have consistently preceded market bottom formations in past cycles. If the historical pattern holds, the price of Bitcoin could fall below the $58,000 mark.
Historical data is relentless: in late 2011, when the asset traded around $2, in January 2015 at $182, in December 2018 at $3,206, and in November 2022 amid the FTX collapse ($15,792) — it was precisely the crossing of the 100-day EMA of NUPL below zero that signaled the end of bearish phases. Currently, this indicator is near the 0.215 level and continues to decline with the price around $63,000. This leaves significant room for further decline.
The scenario is not mandatory, but dangerous
It is important to emphasize: this refers to a recurring historical pattern, not a rigid prediction. Either the indicator will cross the zero line again, confirming the bottom, or the current cycle will be the first to break this pattern. However, "the zero line is a level to watch in the coming weeks" — this is a key signal for any trader.
Market picture: growth in question
After nearly a week of growth, Bitcoin has turned to a decline for the first time since early July, retreating to $63,000 after reaching a two-week high of around $64,500. Derivatives market data does not confirm the sustainability of the upward movement: open interest in BTC futures has decreased from 776,000 BTC on July 3 to the current 740,000 BTC, indicating a decline in trader activity.
Weak demand in the spot market is also concerning. Flows into spot Bitcoin ETFs in June showed a net outflow of over $4 billion, and the Coinbase Premium index, reflecting the activity of American investors, continues to remain in negative territory. I previously noted that Bitcoin's Sharpe ratio has approached values seen in the final phases of bear markets — another alarming signal.
My expert opinion: The market is in a zone of high uncertainty. Although NUPL and other indicators point to a possible bottom, the current macroeconomic environment and the lack of a clear catalyst for growth make the scenario of a drop below $58,000 quite realistic. Investors should prepare for volatility and closely monitor the behavior of the 100-day EMA of NUPL in the coming weeks — this could be a decisive signal for entering the market.