The long-term holder indicator NUPL on the chain sends a signal: the Bitcoin mania period is shortened, and the market may usher in diminishing returns

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glassnode2025/01/17 02:05

By:glassnode

Long-time holder NUPL The (Unrealized Profit) indicator reflects market sentiment and possible trends. NUPL usually reaches a high point when the market is close to the top, and recent data shows that Bitcoin's frenzy phase is undergoing a series of significant changes, especially in the "Extreme Greed" range (NUPL > 0.75).

The long-term holder indicator NUPL on the chain sends a signal: the Bitcoin mania period is shortened, and the market may usher in diminishing returns image 0

Specifically:

Peak of NUPL in the past few cycles:

2011-2015 cycle: NUPL peak was 0.98, the market experienced a long period of strong bull market.

2015-2018 cycle: NUPL peak was 0.97, bull market continued, but slightly weakened.

2018-2022 cycle: NUPL peak dropped to 0.92, although still at a high level, performance has shown signs of fatigue.

Peak of NUPL in the current cycle:

The NUPL of the current cycle is about 0.77, and there are only about 20 days when the time exceeds 0.75 (i.e. the market enters the "extreme greed" stage). This data indicates that although there is still room for further growth in the Bitcoin market, the time window for showing "mania" sentiment is significantly shortening.

Changes in the duration of the "mania" phase:

2011-2015 cycle: The duration of NUPL greater than 0.75 is 450 days.

2015-2018 cycle: The duration of this phase was 385 days, a decrease of 15%.

2018-2022 cycle: The duration of this phase is 228 days, a decrease of 41%.

Based on this trend, the "frenzy" phase of the current cycle may only last for about 135 days.

Average LTH NUPL value during the "mania" stage:

With the passage of time, the average value of NUPL in the "frenzy" stage has gradually decreased.

The average value of NUPL during the 2011-2015 period was 0.91.

2015-2018 cycle: The average value of NUPL dropped to 0.89.

2018-2022 cycle: The average value of NUPL further decreased to 0.85.

If this trend continues, the average LTH NUPL value during the "mania" phase of the current cycle may drop to 0.77.

From the trend of NUPL indicator, the "mania" sentiment in the Bitcoin market is shortening and gradually weakening. Although there may still be room for the market to rise, based on historical data, the mania period of the current cycle may be shorter and the increase may not be as great as in previous cycles. Investors need to be more cautious in their decisions during this cycle, pay attention to changes in market sentiment and indicators, and avoid latent risks caused by overly optimistic expectations.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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