On-chain data shows that the Bitcoin NUL indicator is still below a value of 0.5, a sign that more downtrends may be in store for the crypto before turning down.
Bitcoin net unrealized loss increased, but still 0.5. built below
As pointed out by an analyst in a Cryptoquant post, the price of the cryptocurrency may still be nowhere near the bottom.
The relevant indicator here is “Net Unrealized Loss” (or NUL for short), which tells us about the total number of coins that are currently holding an unrealized loss.
The metric works by comparing the final selling price of each coin on the chain to the current price of bitcoin. If the previous past of a coin was higher than the current one, then that coin is currently making a loss.
On the other hand, the current price being higher than the previous selling price would mean that the coin is in profit at the moment.
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The NUL metric takes into account only the former types of coins. Another indicator, net unrealized profit (NUP), measures the latter category.
Now, here is a chart that shows the coin’s history trend in bitcoin NULs:
The value of the indicator seems to have been rising recently | Source: CryptoQuant
In the above graph, volume marks two distinct regions of the Bitcoin NUL, with a metric value equal to the 0.5 line dividing between them.
It seems that historically, the price of crypto has tended to observe major bottoms when the value of the indicator exceeds 0.5
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As you can see in the chart, the NUL metric has seen some upward trend in recent months. This is because the value of bitcoin has declined during this period, causing more coins to go underwater.
However, despite this recent increase, it looks like the current value of net unrealized loss is still well below the 0.5 level.
If the previous trend is anything to go by, Bitcoin could look to further downside in the coming future before exceeding the price range of NULs and before a bottom is formed.
btc price
At the time of writing, bitcoin price is swimming around $29.7k, up 3% over the past seven days. In the past month, the crypto has lost 23% in value.
The chart below shows the coin’s price trend over the past five days.
Looks like the value of the crypto has gone down over the last couple of days | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com