Bitcoin (BTC) price reacted at $ 44,600 on August 7, the highest level since the infamous May 19 crash. Meanwhile, there is mounting speculation that BTC could see an upward boom similar to the one that began in October 2020.
At least two indicators expected Bitcoin to follow massive uptrends. The first was Glassnode’s entry-adjusted unrealized net profit / loss, which helps investors determine whether the Bitcoin network as a whole is currently making a profit or loss.
Understand NUPL and its heat map
A NUPL value above zero indicates the network is making a net gain, while values below zero indicate a net loss. The further the NUPL deviates from zero, the more it helps investors spot market highs and lows.
You can see the degree of deviation from zero using a heat map. For example, during an uptrend, red means “surrender”, orange means “hope”, yellow means “optimism”, green indicates “faith”, and blue underscores “euphoria”.
In October 2020, the Bitcoin NUPL moved up from zero when its heat map changed from yellow to green after successfully bouncing off the red zone in March earlier this year.
Later prices rose from about $ 10,000 to about $ 65,000.
Bitcoin later fell below $ 30,000, a time when NUPL sentiment shifted from greed to denial and later to fear. But strong buying sentiment near the $ 30,000 mark helped keep Bitcoin’s bullish sentiment intact and offset the fear with optimism.
But just as Bitcoin recaptured $ 40,000 and surpassed its upward momentum, sentiment returned to faith for the first time since October 2020. Lex Moskovski, Chief Investment Officer at Moskovski Capital, also highlighted Bitcoin’s upside prospects after the NUPL upgrade in a tweet, saying:
“We have entered the faith phase.”
Alternatively, the popular Fear and Greed Index hit 69, a value that indicates a mood of greed that the market has not seen since May either.
The second indicator
Similarly, market analyst Will Clemente also highlighted another indicator that promised to repeat the October 2020 upward boom. The fractal concerned the dynamics between short-term and long-term Bitcoin holders.
Clemente found that short-term holders were selling their bitcoin holdings to long-term holders, so the former accumulated almost as much as the bitcoin supply in August 2021 that they had in October 2020.
Similarly: The Ethereum price rises to over $ 3,000 in the “red zone”, which is triggering sales fears
“Long-term owners now have over 66% of the supply, while short-term owners have now dropped to nearly 20%,” the analyst wrote. “Before the main bull run started in October, the supply of long-term owners reached just over 68%.”
This further indicated that the latest price resulted from demand from investors who had no intentions of selling Bitcoin right away.
Bitcoin hit an intraday high of $ 44,600 on Saturday before correcting downward on profit taking. BTC changed hands for $ 43,500 at the time of writing.
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