Bitcoin continues to drift toward the $86,000 mark as “Fear” grips the market, leaving traders questioning whether a true bottom has finally formed.
Price action has remained lackluster, struggling to generate fresh momentum and instead printing a series of lower lows. As BTC hovers in this territory, on-chain indicators suggest that the current fragility could pave the way for further downside before any meaningful recovery takes shape.
The NUPL Signal: Bottom Not Yet In?
A key indicator fueling the bearish narrative is Bitcoin’s Net Unrealized Profit/Loss (NUPL). Currently trending lower, the NUPL suggests an uptick in “panic selling” as investors scramble to either lock in remaining gains or capitulate on their losses.
This data aligns with broader market sentiment; according to CoinMarketCap, the Fear and Greed Index remains mired in “Fear” at 29. Historically, the NUPL has been a reliable cycle-tracking tool:
- The “Green” Zone: Historically, when NUPL dips into negative territory, it marks a definitive market bottom—a phase defined by a total market reset and the beginning of a fresh accumulation cycle.
- The Track Record: In each of the last five market cycles, a move into the negative zone has preceded a massive rebound, eventually catapulting Bitcoin to new all-time highs.
Since the NUPL remains in positive territory for now, the data suggests that selling pressure may persist until the metric cools down further.
Accumulation is Climbing, but Conviction is Shaky
While the immediate price structure looks uncertain, long-term bulls are still busy. Many investors appear to view sub-$90k levels as a “discount” entry point. This shift is visible in the Delta Growth Rate (the spread between Market Cap and Realized Cap).
The Delta Growth Rate has already flipped negative, signaling a transition from speculative trading to fundamental accumulation. Outside of a major macro shock or systemic event, this phase typically reduces the risk of a mass capitulation.
The Spot Market Bottleneck
Despite the accumulation by “diamond hands,” the spot market remains the primary hurdle. Centralized exchanges saw roughly $213 million in net spot selling over the past week. This stands in stark contrast to the week ending January 19, which saw nearly $944 million in spot inflows that acted as a price floor.
Without a renewed surge in spot demand, Bitcoin may find it difficult to regain its footing and stage a sustained breakout.
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