With the drop in bitcoin price, NUPL has brought about a cooling phase. To briefly explain NUPL, it is calculated as market cap - realized cap / market cap = NUPL.
Some important levels await us at this value. Where to invest and where to take profits are very important. We will interpret this data straightforwardly without any additional input.
There have been color changes with the rise and fall of the price. What do these mean? In short, they show us how much fear or greed there is. The value of 0 is a threshold level; when the price falls below this level, most people are at a loss because the realized value remains higher while the market value is lower. Below the value of 0 is a great area for investment, as investments made in this way have resulted in very good outcomes in the long term.
Where is it suitable for selling? Here, the levels of 0.25, 0.50, 0.75, and 1 come to the forefront. When we examine the previous bull market levels, we see that the peak level of 0.75 was tested 4 times. This is the peak of the bull and the area of excess. Here, everyone behaves very greedily, and people flock to the market; it is precisely at these levels that exits should be made.
There are also cooling phases that occur during bull trends. These need to be read correctly. Like in 2019-2020, NUPL passed 0.50 and then entered a cooling phase, falling below 0.50, then 0.25, and finally below 0, reaching a very suitable area for investment. Now, we cannot know how long this cooling will last; we need additional data.
It is hovering around 0.50; breaking this level could take us back to 0.25, and as it goes back, the selling pressure will decrease. As it goes up, the selling pressure will increase. I have shown you how to use and interpret this metric straightforwardly. I hope this has been helpful.
Written by XBTManager