As the BTC price fell below 45,000 USD, the Bitcoin “sell rebound” indicator flickered again


A bitcoin (Bitcoin) The on-chain indicator that found a dead cat rebound during the past bearish market correction will flicker again in August 2021.

This indicator is called “Bitcoin: NUPL for short-term holders” and it takes into account Unspent transaction output, or UTXO, BTC transactions not exceeding 155 days. In the process, it tries to determine whether investors are profitable within 155 days of buying and holding Bitcoin.

Therefore, if the NUPL reading, which represents net unrealized profit/loss, is below zero, it means that the investor’s Bitcoin investment is suffering losses. Conversely, a NUPL above zero indicates that investors are making a profit.

Glassnode reported on Thursday that the Bitcoin NUPL for short-term investors has risen above zero, which is the first profit since the collapse of the crypto market in May 2021.At the same time, the blockchain analysis platform also Implying concerns about potential selling, Citing the fractals of the bear market cycles of 2014-15, 2018 and March 2020.

NUPL chart for short-term Bitcoin holders. Source: Glassnode

In detail, short-term Bitcoin holders are earlier Take advantage of the recovery During the revision period to ensure interim profit.

The price trend during the bearish period of 2014-15 shows that despite a 100% rebound, BTC/USD is still recovering to a downward correction. Similarly, in 2018, the 97.41% upside retracement had little effect on protecting the market from the prevailing bearish bias.

During the 2014-15 and 2018 bearish cycles, the recovery of Bitcoin price did not last. Source: TradingView.com

The latest upward recovery in 2021 is when the Bitcoin price Approximately US$65,000 to approximately US$29,000After the subsequent sharp rebound, the cryptocurrency rose to $46,787 on the Bitstamp exchange, an increase of 63.59%.

Bitcoin fell again on Thursday, falling below the psychological support of $45,000. At the session low, the cryptocurrency changed hands for $44,100.

BTC/USD price performance in recent history. Source: TradingView.com

A bullish case with different opinions

Glassnode pointed out that this “rapid recovery” is common in two situations: bear market relief rallies or bull market suspicion phase.

Therefore, when saying this, the blockchain analysis platform does not rule out the possibility of prolonging the bull market, such as the bull market seen during the upward boom in 2013, 2019, and 2020.

More evidence confirming the bullish outlook comes from Glassnode Report released earlier this weekThe platform found that the decrease in short-term holders was consistent with the increase in long-term holders, so the supply of bitcoin held by long-term holders reached a record high of 82.68% of all circulating coins.

related: With more than $1 million in BTC transactions soaring, large holders accumulate Bitcoin to below $50,000

At the same time, short-term holders of bitcoins have dropped to 25% of the net bitcoin supply in circulation, indicating that holdings have increased.

Proportion of long-term and short-term holders’ supply. Source: Glassnode

Historically, when the short-term holder ratio drops to 20%, it will lead to a tight supply situation, that is, when the coins in circulation cannot meet current demand.

“This is very similar to the number of coins held [long term holders] In October 2020 before the main bullish impulse begins,” the Glassnode analyst wrote, adding:

“Although the supply crunch is based on [short-term holder] The supply ratio has not yet reached 20%, and there are many indicators and trends suggesting that it may reach this level in mid-September (but supply constraints are already in play). “

At the time of writing, Bitcoin is trading at approximately $44,200.

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