A new on-chain analysis points out that Bitcoin may not have reached a definitive bottom in its current downward cycle, suggesting the market could still test weaker levels. Research from CryptoQuant highlights the significance of the Net Unrealized Profit/Loss (NUPL) indicator’s long-term trend, noting that historically, bear market bottoms have formed when this metric drops to even lower levels.
NUPL indicator at a critical threshold
In a research report published Monday, CryptoQuant focused on the NUPL metric, which tracks the profit and loss status of Bitcoin supply. This key indicator gauges the proportion of circulating coins held at a profit or a loss based on their last transaction price. The current NUPL value stands at 0.158, a level not seen since the beginning of 2023.
Mini glossary: NUPL is an on-chain indicator measuring the unrealized profit or loss status of Bitcoin holdings. EMA, or exponential moving average, is a technical measure that assigns more weight to recent data changes.
TheChessOnChain, a contributor to the research, noted that the NUPL metric, when smoothed using a 30- and 100-day exponential moving average, provides one of the clearest on-chain cycle signals. The accompanying chart showed the 100-day NUPL average is slowly approaching the sub-zero cycle bottom regions.
According to TheChessOnChain, every time Bitcoin’s 100-day NUPL average fell below zero, a cycle bottom formed—most notably at the end of 2011, early 2015, through the 2018 bear market, and following the FTX collapse in 2022.
Comparison with previous cycles
The analysis emphasizes that periods when the 100-day NUPL average dropped below zero historically coincided with significant Bitcoin bottoms. These include roughly $2 at the end of 2011, $182 in January 2015, $3,206 in December 2018, and $15,792 following the FTX crisis in November 2022.
| Period | Approximate bottom price | 100-day NUPL EMA status |
|---|---|---|
| End of 2011 | Around $2 | Below zero |
| January 2015 | $182 | Below zero |
| December 2018 | $3,206 | Below zero |
| November 2022 | $15,792 | Below zero |
Currently, with Bitcoin trading just above $60,000, the 100-day NUPL average sits at 0.215. Compared to previous bear market bottoms, analysts observe there is still room for the metric to decline toward historically relevant bottom zones.
Zero line is key, but not a definitive rule
Nonetheless, CryptoQuant points out that over Bitcoin’s history, the NUPL metric has gradually established higher lows, suggesting it may not necessarily need to fall below zero again. The research underscores that the four prior zero crossings should be viewed as a recurring pattern, not as a set-in-stone rule.
CryptoQuant stresses that while the zero line remains an important level to monitor in the coming weeks, it is not currently possible to pinpoint an exact timeframe for the next bottom.
Although several on-chain recovery signals reminiscent of 2022 have emerged in recent weeks, many investors believe new macro lows could come into focus before bulls regain full control of the market.
Other on-chain data also strikes a cautious note
CryptoQuant analyst Axel Adler Jr. draws attention to a mixed picture in short- and medium-term supply data. According to Adler, the amount of supply held at a loss remains about two months away from levels seen at the ends of past Bitcoin bear markets.
For this reason, Adler suggests it would be more accurate to consider the capitulation process as ongoing rather than having already concluded.
