Bitcoin's NUPL Metric Signals Potential Bull Market Peak

According to Cointelegraph, Bitcoin (BTC) may be approaching its "final expansion" towards a peak, despite recent price fluctuations. Onchain analytics platform CryptoQuant has observed patterns in BTC price history that suggest a repeat of past market cycles. The Net Unrealized Profit/Loss (NUPL) metric, which measures the balance of profit and loss among Bitcoin holders, has entered a zone historically associated with market tops. Currently, the NUPL stands at +0.52, a level that has previously marked the transition from optimism to euphoria in the market. In past cycles, such as those in 2017 and 2021, NUPL readings above 0.5 indicated that a majority of investors were in profit, fueling speculative activity. Presently, approximately 97% of the circulating Bitcoin supply is in profit, reflecting strong market confidence but also suggesting limited potential for further gains without a period of consolidation. CryptoQuant's data also highlights a significant shift in the Bitcoin realized cap, which is increasingly dominated by short-term holders (STHs). These entities, who hold Bitcoin for up to 155 days, now account for a record 44% of the realized cap. This metric, which represents the total supply valued at the price it last moved, suggests that newer investors are acquiring Bitcoin from older investors who are taking profits. This trend has historically coincided with the final expansion phase of a bull market. However, the current market dynamics differ from previous cycles due to large-scale institutional involvement. Factors such as ETF inflows, expanding stablecoin liquidity, and institutional participation are absorbing sell pressure, creating a more stable form of market euphoria. On-chain data indicates that Bitcoin is in a mature speculative phase, supported by liquidity and continuous capital inflows. A decline in the STH share would signal the beginning of a renewed accumulation phase led by long-term investors. As reported by Cointelegraph, Bitcoin's short-term holder cohort is currently facing a profitability challenge. CryptoQuant estimates the aggregate cost basis for STHs at $112,500 as of Tuesday, making this week's BTC price range crucial for overall profitability. The realized price, or cost basis, acts as support during bull-market downturns, but its breach can also turn the trend line into resistance. CryptoQuant's data shows that this fluctuation is currently occurring, with the spot price oscillating above and below the STH cost basis trendline. This article does not provide investment advice or recommendations. Every investment and trading decision involves risk, and readers should conduct their own research before making any decisions.