Since the general market decline caused by the fall of the Japanese stock market, bitcoinThe largest cryptocurrency asset, has been consistently experiencing significant price swings, sparking speculation of a major price drop as several key metrics turned bearish, pointing to a possible extended decline.
bitcoin could experience a bearish movement towards $40,000
As bitcoin continues to demonstrate bearish momentum, Grizzly, a technical and on-chain analyst, navigating bitcoin's recent price action, has twitter&utm_medium=sns&utm_campaign=quicktake&utm_content=grizzly” target=”_blank” rel=”noopener nofollow”>issued A cautious prediction, which indicates that btc could fall further to around $40,000. The market expert’s dire forecast for the crypto asset is based on the crucial NUPL (net unrealized profit/loss) metric.
It is worth noting that the NUPL metric is a tool to determine the distinction between relative unrealized gain and relative unrealized loss. Simply put, the tool illustrates the mood of investors and what bitcoin owners Those who wish to sell their possessions will either win or lose.
When NUPL is high, it suggests that a sizable section of the market is in profit, which may create pressure to sell or take earningsOn the other hand, when NUPL is low, it means that most market participants are losing money, which encourages additional buying or a bullish mood.
According to the analyst, the current readings of the NUPL metric are entering a range that typically marks the beginning of a bitcoin price decline, as it is currently positioned near a critical level of 0.4, indicating a likely downward trajectory.
The 0.4 level has historically been an important support and resistance level, and according to the data, a break below this mark usually signals the start of a major downtrend. If the index continues its downward trend, Grizzly is confident that the bears can take full control of the market.
As a result, the expert anticipates a sharp decline in bitcoin to around $40,000 in the near term. While the analyst expects a price drop due to the NUPL metric, he has noted that the magnitude of the current drop is not yet strong enough to signal the end of the uptrend conclusively.
btc experiences a slight rebound
Given the volatile nature of bitcoin, Grizzly’s analysis acts as a warning to cryptocurrency investors about potential price instability for the crypto asset in the near future.
Currently, the digital asset is showing healthy movement, after witnessing a slight recovery at the $56,632 level. btc may have bounced back to $58,531, but over the past week, the flagship coin is still down more than 3%.
While the overall market sentiment is bearish, there is still room for the asset to attract further gains as its daily trading volume has increased by over 6%, suggesting optimism among investors.
Featured image from LinkedIn, chart from Tradingview.com
