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Indicators suggest that Bitcoin is looking to repeat the October 2020-like rally that sent BTC prices from $10,000 to $65,000.
Bitcoinâs (BTC) price reached as high as $44,600 on Saturday, the highest level since before the infamous May 19 crash. Meanwhile, there are increasing speculations that BTC could undergo a similar upside boom like the one that began in October 2020.
Bitcoin reached $44,600 before correcting lower on profit-taking sentiment. Source: TradingView
At least two indicators expect Bitcoin to pursue massive uptrends. The first one is Glassnodeâs entry-adjusted Net Unrealized Profit/Loss (NUPL), assists investors in determining whether the Bitcoin network as a whole is currently in a state of profit or loss.
Understanding NUPL and its heat map
An NUPL reading above zero indicates that the network is in a state of net profit, while values below zero indicate a state of net loss. The further NUPL deviates from zero, the more it helps investors to identify market tops and bottoms.
Investors spot the degree of deviations from zero via a heat map. For example, during an uptrend, red indicates âcapitulation,â orange means âhope/fear,â yellow shows âoptimism/anxiety,â green hints âbelief/denial,â and blue underscores âeuphoria/greed.â
In October 2020, Bitcoinâs NUPL moved upward of zero as its heat map changed colors from yellow to green after successfully bouncing off the red zone in March earlier that year.
Later, the prices moved from approximately $10,000 to around $65,000.
Bitcoin entry-adjusted NUPL. Source: Glassnode
Bitcoin dropped later to below $30,000, a period that saw its NUPL mood switch from âgreedâ to âdenialâ and later to âanxiety.â But a strong buying sentiment near the $30,000 level helped to sustain Bitcoinâs upside sentiment intact, offsetting âanxietyâ with âoptimism.â
But just as Bitcoin reclaimed $40,000 and exceeded its upside momentum, the sentiment switched back to âbeliefâ for the first time since October 2020. Lex Moskovski, chief investment officer of Moskovski Capital, also highlighted Bitcoinâs upside prospects following the NUPL upgrade in a tweet, saying:
âWeâve entered the Belief phase.
Alternatively, the popular Crypto Fear & Greed Index also touched 69, a score that indicates a sentiment of âgreed,â which the market also hasnât seen since May.
The Fear & Greed Index has risen to âgreedâ as Bitcoin hits $44,000. Source: Alternative
The second indicator
On a similar note, market analyst Will Clemente III also highlighted another indicator that promises to repeat October 2020âs upside boom. The fractal concerned the dynamic between short- and long-term Bitcoin holders.
Clemente III noted that short-term holders sold off their Bitcoin holdings to long-term holders, insomuch that the former accumulated almost as much as the Bitcoin supply in August 2021 as they had back in October 2020.
Related:Â Ethereum price soars above $3K into 'red zone' triggering sell-off fears
âLong-term holders now have over 66% of supply, short-term is now down to nearly 20%,â the analyst wrote. âBefore the main bull run began in October, long-term holder supply reached just over 68%.â
Short-term holders have been doing most of the selling. Source: Glassnode
That further indicates that the latest price appeared out of demand from investors who had no intentions of selling Bitcoin immediately.
Bitcoin achieved an intraday high of $44,600 on Saturday before correcting lower due to profit-taking sentiment. BTC was changing hands for $43,500 at the time of writing.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.