The on-chain analytics platform Glassnode, in partnership with Coinbase, has highlighted a critical Ethereum metric that accurately forecasted the recent ETH price rally. The metric, known as Net Unrealized Profit/Loss (NUPL), indicated a deep capitulation phase earlier this year, which preceded the current bullish momentum pushing Ethereum above $3,600.
According to Glassnode’s latest update shared on X, the Ethereum NUPL tracks the net state of profit or loss among all ETH investors by evaluating the difference between their entry prices and the current market value.
When the indicator enters negative territory, it signals that more holders are at a loss than in profit. Earlier this year, NUPL dipped as low as -0.2, placing the Ethereum market in a strong capitulation zone. Historically, such deep levels of unrealized losses often mark the bottom, as bearish sentiment tends to peak just before reversals occur.
This exact pattern played out as Ethereum rebounded strongly in recent weeks. From its lows, ETH has surged over 20%, currently trading near $3,600, outperforming Bitcoin during the same period.
Glassnode emphasized that this shift in sentiment is not just technical, but behavioral. As investors moved from net losses to profits, overall market sentiment has improved. However, analysts caution that once the majority of holders are deep in profit, euphoria can set in, which could potentially signal an upcoming top and trend reversal.
At the time of writing, Ethereum continues to maintain its bullish trajectory, driven by strong buying interest. However, traders and investors are advised to monitor the NUPL metric closely. As history suggests, once the pendulum swings too far into profit, a correction may not be far behind.
This latest insight from Glassnode highlights the significance of on-chain metrics, such as NUPL, in identifying key turning points in the cryptocurrency market. With ETH’s price performance outshining BTC in the short term, all eyes are on how long the rally can sustain before profit-taking begins.
ETH Price Update: Ethereum trades at $3,600, up more than 20% over the past week, marking a clear divergence from Bitcoin.
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