Bitcoin’s start to November once again disappointed traders. It has fallen 2.4% in the past 24 hours and 6.2% in the past week.
While the market has been stuck in a pattern of short rallies and deep pullbacks, on-chain data now points to a likely significant further decline before the next uptrend begins.
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NUPL suggests market bottom is not fully in
The Net Unrealized Gain or Loss (NUPL) metric shows how much profit or loss a Bitcoin investor has. When NUPL’s value plummets, it signals that holders are losing the incentive to sell, often setting the next bottom.
Bitcoin’s NUPL currently stands at 0.47, its lowest level since April 8, when it fell to 0.42. In that early cycle, Bitcoin’s NUPL declined in three steps (0.48 on February 26th, 0.44 on March 10th, and 0.42 on April 8th). Bitcoin has since risen from $76,000 to more than $125,000.
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This time, the index began to decline from late October. And the current reading is in line with the level of February 26, the first stage of the previous decline. If this structure repeats, we could head towards the next low, i.e. 0.42-0.44, by early to mid-December, which could be the next stage of buildup before the recovery takes hold.
The decline in NUPL includes a shakeout of weak hands, so the steady decline in BTC price is likely to continue. And that now seems likely!
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A bearish crossover could be triggered – and it’s happening now
A “bearish crossover” occurs when a short-term exponential moving average or EMA (such as 50 days) is below a long-term one (such as 100 days). This crossover is currently forming on Bitcoin’s daily chart, and it is extremely important.
The Exponential Moving Average (EMA) is a short-term trend indicator that tracks price changes by giving more weight to recent movements. This helps identify whether buyers or sellers are currently controlling the market.
From a buyer and seller perspective, this indicates that short-term sellers have an advantage over long-term holders. This reflects a change in dominance. Traders who bought recently are exiting, while long-term investors are holding off on buying until tangible strength returns.
This setup often causes panic selling and drives weak hands out of the market before a new accumulation phase begins. If the 50-day EMA falls completely below the 100-day and price does not recover soon, a short-term severe shakeout that pushes NUPL into the final reference range (0.42-0.44) could accelerate.
Major Bitcoin price levels to watch
Bitcoin is currently hovering around $106,900, just above the 0.786 Fibonacci retracement at $106,300. This level served as short-term support in October. If the price breaks above this level, the next target will be around $103,500. This results in approximately a 3% to 4% reduction in NUPL. If this level is broken, BTC price may fall.
However, if the price closes above $111,400 for the day, the short-term structure will turn bullish again. This level has been acting as resistance since October 30th. A break above this level will negate the effect of the bearish crossover and open the way to the $113,300 zone. However, such a large Bitcoin price increase would also invalidate the bottom price theory based on NUPL, at least for now.
