Bitcoin seems to find temporary support around $30,000, but another drop is not ruled out.
The leading cryptocurrency has lost more than $43,600 in the past 7 months. The price slipped from an ATH near $69,000 in early November 2021 to a multi-year low at $25,365.
NUPL is a useful on-chain metric that measures the total amount of profit or loss in the market. This metric represents the potential investor sentiment at a given time, helping to determine price volatility.
Market sentiment around Bitcoin has shifted from Anxiety to Fear after the price dropped below $30,000. However, NUPL shows that investor sentiment must decrease from Anxiety to Capitulation to mark the end of the downtrend.
The logarithmic regression lines pointed out by YouTuber Benjamin Cowen identify two key price levels at which Bitcoin could hit bottom: The non-bubble fit regression band sits at $22,380, while the non-bubble lower regression band hovers around $15,110. Price hitting these levels could push NUPL into capitulation, providing a unique opportunity for fringe investors looking to re-enter the market.
Even so, it remains to be seen whether the combination of NUPL and logarithmic regression lines will help predict market bottoms as has been done in the past. It should also be noted that after a significant correction over the past few months, Bitcoin is likely to enter a period of consolidation before the next major price move.
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