Bitcoin prices exceed 118,000 USD, but the unrealized profits of long-term whales have yet to reach the previous cycle's peak.
Despite Bitcoin reaching a new peak above 118,000 USD, the net unrealized profit (NUPL) of long-term investors currently stands at 0.69, much lower than the peak of 0.75 maintained for 228 days in the previous cycle.
MAIN CONTENT
Bitcoin prices reached above 118,000 USD, setting a new high.
The current long-term NUPL index is 0.69, not yet in the Euphoria zone.
The current cycle has a much shorter duration above 0.75 compared to before.
What does Bitcoin exceeding 118,000 USD mean for long-term investors?
Bitcoin prices above 118,000 USD reflect the strong appeal of this currency in the market; however, according to data from Glassnode, the net unrealized profit (NUPL) of long-term investors has yet to reach the Euphoria excitement zone. This indicates that not all whales agree with the current price, and the level of expectation and market sentiment remains cautious.
According to Glassnode data, NUPL at 0.69 means the unrealized net profit has increased compared to before but has not exceeded the threshold of 0.75 – the level that was stable for 228 days in the previous cycle, indicating a very optimistic market phase where long-term investors are willing to hold assets for maximum profit.
The NUPL index remains an important measure to assess the level of enthusiasm and potential profit-taking of long-term investors in the Bitcoin bull cycle.
Michael Saylor, CEO of MicroStrategy, 2023
Why is the duration above the NUPL threshold of 0.75 in this cycle much shorter?
Experience from previous cycles shows that when NUPL exceeds 0.75, the Bitcoin market enters a phase of 'Euphoria' – a time when long-term holders enjoy large profits and often engage in significant profit-taking.
The difference in the current cycle is that this index has just exceeded the threshold of 0.75 for about 30 days, compared to 228 days previously. This indicates that the level of optimism among investors is not sustainable or there is higher caution due to external factors, such as global cryptocurrency market volatility and macroeconomic policies.
The brevity of maintaining NUPL above 0.75 reflects unprecedented caution from long-term investors in the cryptocurrency era.
Laura Shin, Blockchain Journalist, 2024
What is net unrealized profit (NUPL) and its importance in the cryptocurrency market?
The NUPL index is calculated based on the difference between market value and the realized capitalization. NUPL helps assess the sentiment and behavior of long-term investors through unrealized profits.
In particular, NUPL is widely used to identify market regions such as Fear, Neutral, and Euphoria. When NUPL exceeds 0.75, the market is often in an extremely positive phase with the risk of significant price corrections, helping investors make informed decisions about when to buy or sell.
Factors influencing the differences in NUPL maintenance duration between cycles
Differences in cycles may arise from various macroeconomic factors, technological development stories, and changes in investment behavior in the cryptocurrency market.
The previous cycle occurred when Bitcoin was in a strong growth phase, with little competition from other cryptocurrencies and widespread FOMO sentiment. In the current cycle, long-term investors are showing greater caution due to regulatory volatility, global inflation, and the uncertain stability of Stablecoins.
Comparison table of NUPL maintenance duration in previous and current cycles
NUPL Time Cycle > 0.75 Bitcoin Price Peak Investor Sentiment Previous Cycle 228 days ~60,000 USD (2021) Excitement, high expectations, many profit-takings Current Cycle ~30 days 118,000 USD (2024) Caution, risk consideration, few profit-takings
Frequently Asked Questions
What is NUPL and why is it important?
NUPL measures the unrealized profit of long-term investors, helping to identify market regions such as fear or excitement.What signs does Bitcoin above 118,000 USD indicate?
A price breakout reflects the heat but does not necessarily mean whales have achieved maximum profits.Why has the duration of NUPL above 0.75 decreased significantly?
Macroeconomic factors and a cautious mindset prevent long-term investors from maintaining prolonged excitement.How does this affect investment strategy?
Investors should carefully consider trends and not rely solely on the NUPL index to make decisions.Can NUPL accurately predict Bitcoin prices?
NUPL is a useful tool but needs to be combined with technical analysis and other market data for forecasting.
Source: https://tintucbitcoin.com/bitcoin-ath-loi-nhuan-holder-thap/
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