inside November monthly report, we talked about the Net Unrealized Profit/Loss (NUPL) indicator which shows that the market is in a healthy state of unrealized profit compared to previous cycles. We can subdivide that indicator into short-term and long-term holding groups.
For short-term stock holders, one of the biggest short-term concerns is more and more unrealized losses in the market. As the price continues to hover below the short-term holding cost base around $53,000, there is an increased risk that many new buyers who invest and sell their bitcoins suffer a loss, driving the price lower. This could be a bear market forming or an opportunity for holders to buy cheaper bitcoin.
Long-term holdings, short-holder investment will spark new bear markets as new buying, short-term holders are the primary drivers of bulls. However, we can see in many bull market dynamics that increased unrealized losses by short-term holders are common and can be short-lived as long as holders Long term have faith and wait for higher prices.
It’s a different story for long-term holders, who seem pretty comfortable and largely in a healthier profit position at current prices than their actual prices (cost basis). ). So far with the most recent drop, the supply of long-term holdings is in a slightly bearish neutral state. Currently, healthy, not excessive profit taking signals that the market is in a steady state and consolidating.
https://bitcoinmagazine.com/markets/nupl-shows-bitcoin-market-healthy NUPL analysis shows Bitcoin market in healthy state with unrealized profits