NUPL Indicator Breaks Out After 21 Months, Signaling a Bullish Rally for Bitcoin

By Tsunami 03/19/23 3:48 AM

Bitcoin, the world’s largest cryptocurrency, has seen a remarkable surge in its price in recent weeks, causing the Net Unrealized Profit/Loss (NUPL) indicator to return above zero, indicating that investors are making profits. According to data by CryptoQuant, after a 21-month period, a breakout is now evident in the NUPL.

The NUPL indicator is used to determine whether Bitcoin holders are in profit or loss by calculating the difference between the current price and the price at which a particular coin was last moved. If the indicator is above zero, it means that investors are in profit, and if it’s below zero, it means they are in loss.

By adding the 365-day and 60-day moving average lines to the chart, it’s evident that the blue line broke above the yellow line after a gap of 21 months. The last time a breakout occurred was in June 2021, but it proved to be a fake one and continued to decline.

This pattern has been repeated many times since 2013, and each time Bitcoin has experienced strong bullish rallies. However, it’s important to note that various on-chain and technical metrics indicate that the bear market is coming to a close, but macroeconomic uncertainty can still cause disruption to any such scenario.

Many analysts believe that this is the first significant test for Bitcoin in proving its superiority as a store of value over traditional assets. The cryptocurrency’s performance during times of economic uncertainty will be a crucial factor in determining its long-term success.

Despite the recent surge in its price, Bitcoin remains a highly volatile asset, and investors should be cautious before investing in it. However, the NUPL breakout is undoubtedly a positive sign for Bitcoin investors, and if history repeats itself, we could see a significant rally in the cryptocurrency’s price in the coming months.

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