Bitcoin’s price has fallen sharply over the past few months, bringing an end to the bull market cycle. However, a closely watched Bitcoin market indicator is currently drawing renewed attention in the sector due to its reputation in determining when the next possible BTC bull run could take place.
History Says Bitcoin Rallies When This Metric Flips Red
After Bitcoin’s steep pullback, investors are now watching closely for the next bullish breakout that could kick off another BTC bull run. On-chain indicators have often been a reliable source for determining the next bull run, and Joao Wedson has highlighted a key metric that stands out in this context.
Specifically, the verified author and founder of Alphractal has shared insights into the matter using the Bitcoin Net Unrealized Profit/Loss (NUPL) for Long-Term Holders. This metric measures the average unrealized profit or loss of the most reliant investors in the market.
According to the expert, the next bull run for Bitcoin usually begins when this metric flips red. Irrespective of how it sounds, previous cycles have demonstrated that the color shift frequently corresponds with times of highest pessimism when selling pressure peaks and long-term accumulation subtly start.
Recent data seen on the chart tells that the metric is currently positioned at the 0.36 level, which implies that long-term holders remain on average in terms of profit. However, Wedson highlighted that the most significant signal often emerges when the metric shifts into negative territory.
It is worth noting that when long-term holders NUPL shifts into negative territory, it indicates that losses continue to mount even among the most convinced participants. In the past, this pattern has marked the phase of maximum market depression. In Wedson’s view, this stage reflects seller exhaustion, the transfer of coins to stronger hands, and the beginning of a new market cycle.
This was the last stage before a fresh Bull Run began in earlier cycles. “Opportunities are not built at the top, they are built in depression,” Wedson added.
BTC Accumulator Addresses Are Rising
Darkfost, an author at CryptoQuant, has shared a detailed analysis of Bitcoin accumulator addresses, which appear to be steadily rising. According to the expert, these addresses represent a specific class of long-term holders, and their recent actions are very noteworthy. A tendency toward increasing accumulation often indicates that supply is being covertly absorbed, reducing the quantity of Bitcoin on the open market.
Data shows that the current average monthly accumulation is a staggering 372,000 BTC. These investors or corporations, who continue to accumulate aggressively, seem to be taking advantage of the current dip in Bitcoin. In contrast, the average monthly accumulation of these addresses was only over 10,000 BTC in September 2024.
Market structure indicates that some investors are responding emotionally to short-term price movements, while others seem to be planning for the long run, which has always been one of the best ways to invest in BTC.
Featured image from Pixabay, chart from Tradingview.com
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