🔥🔥🔥 What’s A Simple #Strategy For Buying & Selling #Bitcoin ? This Analyst Answers
A #cryptocurrency analyst has unveiled a straightforward approach for timing Bitcoin purchases and sales based on historical patterns observed in two key $BTC on-chain indicators.
These indicators, known as Net Unrealized Loss (NUL) and Net Unrealized Profit (NUP), track the total amount of unrealized loss and profit carried by investors, respectively.
The methodology involves examining the transaction history of each circulating coin to determine its last transacted price. If the previous price was lower than the current spot price, indicating a profit, it contributes to the NUP. Conversely, if the cost basis exceeds the current value, it adds to the NUL.
Historical analysis of the NUL suggests that when the indicator surpasses the 0.5 level during periods of bear market lows, it could be an opportune moment to increase holdings.
Conversely, the NUP historically exceeding the 0.7 level during major tops could indicate a potential selling opportunity.
Currently, both indicators reflect trends in Bitcoin's price action. The NUL hovers near the zero mark, suggesting minimal unrealized losses amid recent all-time highs, while the NUP is yet to breach the crucial 0.7 level, indicating the market may not have reached an overheated state.
It's worth noting that while these indicators haven't precisely pinpointed tops or bottoms in the past, following the strategy of buying during NUL signals and selling at NUP levels has historically been profitable, despite occasional discrepancies.
As Bitcoin trades around $69,400 at the time of writing, down 2% in the last 24 hours, investors may consider these indicators as additional tools for decision-making amid market volatility. However, the sustainability of these patterns in the current Bitcoin cycle remains to be seen.
Source - newsbtc.com