Since the general market crash caused by the fall of the Japanese stock market, Bitcoinlargest cryptocurrency, has been consistently experiencing significant price swings, prompting speculation of a pointed price drop as several key indicators have turned bearish, indicating the possibility of a longer decline.
Bitcoin could experience a downward move to $40,000
As Bitcoin continues to exhibit bearish momentum, Grizzly, a technical and on-chain analyst analyzing Bitcoin’s recent price action, released warning that BTC could fall further to around $40,000. The market expert’s uncomfortable forecast for the crypto asset is based on the key NUPL (Net Unrealized Profit/Loss) indicator.
It is worth noting that the NUPL metric is a tool used to differentiate between relative unrealized profit and relative unrealized loss. In uncomplicated terms, this tool illustrates investor sentiment and what Bitcoin Owners who want to sell their shares can earn or lose on it.
When the NUPL ratio is high, it suggests that a significant portion of the market is taking profits, which could lead to selling or acquisition pressure profitsOn the other hand, when NUPL is low, it means that most market participants are losing money, which encourages additional buying or bullish sentiment.
According to the analyst, the current NUPL indicator readings are entering a range that typically marks the beginning of a decline in Bitcoin price, as they are currently hovering near the critical 0.4 level, indicating a likely downward trajectory.
The 0.4 level has historically been a major support and resistance level, and according to data, a break below this level often signals the beginning of a major downtrend. If the index continues its downtrend, Grizzly believes that bears could take complete control of the market.
As a result, the expert predicts a forceful decline BTC to around $40,000 in the low term. The analyst expects prices to decline due to the NUPL indicator, but indicated that the scale of the current decline is not yet huge enough to clearly signal the end of the uptrend.
BTC is experiencing a slight rebound
Given the volatile nature of Bitcoin, Grizzly’s analysis serves as a warning to cryptocurrency investors about the potential for cryptocurrency price volatility in the near future.
Currently, the digital asset is showing vigorous movement after witnessing a slight recovery at $56,632. BTC may have rebounded to $58,531, but the flagship coin is still down more than 3% in the past week.
Even though the overall market sentiment is bearish, the asset still has a chance to gain further as its daily trading volume increased by over 6%, suggesting optimism among investors.
Featured image from LinkedIn, chart from Tradingview.com
