Bitcoin: Why a price prediction of $58K isn’t totally out of question
The short-term outlook favored a deeper correction toward $58k. On the other hand, the past week saw Bitcoin continue to leave exchanges.
- Bitcoin posted losses measuring 14% within the past six days.
- The NUPL usually does not stay above +0.6 for a prolonged period.
Bitcoin [BTC] recorded losses amounting to 7.2% in ten hours before press time. The BTC pullback was live, as AMBCrypto reported earlier. However, the $64.8k support region did not halt the bearish advance.
An analyst posted on CryptoQuant’s Insights page about how the current Bitcoin uptrend could be nearing its end. They explored the NUPL metric and what it could mean for BTC investors.
Bull run conditions even before the halving event
The Net Unrealized Profit/Loss (NUPL) is a useful tool for identifying when investors are in profit. Its calculation involves the realized cap of Bitcoin to understand investor profitability better.
The analyst noted that the NUPL metric rarely stays above the 0.6 mark for long. A +0.6 reading on this metric is usually followed by a sharp price correction, although this trend gets bucked amid bull runs.
From December 2020 to April 2021, the NUPL was consistently above +0.6 as Bitcoin rallied from $19k to $60k.
On the 28th of February, the NUPL climbed above +0.6 once more. Bitcoin sailed past $73k but was unable to hold on. Since the 16th of March, the NUPL has fallen below +0.6, and the price was at $63k at press time.
The short-term outlook favored a deeper correction toward $58k. On the other hand, the past week saw Bitcoin continue to leave exchanges. This was a sign of accumulation.
The BTC netflow chart showed more BTC leaving centralized exchanges than entering them even when prices began to pull back from the $73k mark.
Long-term holders maintained firm conviction
The spent output age bands saw a large spike in the spent output of holders whose BTC were aged just 1-3 months on March 13th. This meant short-term holders booked profits. Similar spikes in late February and early March also noted holders selling as prices rose higher.
However, only a few of the longer-term holders whose coin age was a year or longer did not relinquish their assets as prices fell below the $70k level recently. This showed faith in Bitcoin.
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But it must be remembered that their behavior is not a perfect guide to Bitcoin’s trends- sometimes, the long-term holders panic and sell en masse even when BTC makes a long-term low.
A recent AMBCrypto report explored how the current retracement could play out in the next 4-6 weeks. The Bitcoin halving cycle appeared to be repeating itself, but long-term investors need not worry about the short-term price volatility.
