 ▲ Bitcoin (BTC) plunges © |
Bitcoin (BTC)’s next explosive bull run may still be far off. According to historical data, a true market rally tends to begin only when even the most steadfast long-term investors are plunged into losses and endure extreme pain.
On February 17 (local time), crypto-focused media outlet Bitcoinist reported that as market participants struggle to gauge the timing of Bitcoin’s next major expansion phase, Joao Wedson, founder and CEO of Alphractal, unveiled a new chart. The chart presents historical patterns for bull market timing by focusing on the profit positioning of long-term holders.
The key indicator highlighted by Wedson is the Long-Term Holder Net Unrealized Profit/Loss (LTH NUPL). This metric measures the average unrealized profit or loss of wallets held by long-term investors who demonstrate strong holding behavior and minimal selling activity. The current reading stands at 0.36, indicating that long-term holders are still, on average, sitting on unrealized gains above their purchase prices.
The true significance of the analysis emerges when this indicator enters negative territory. Historically, periods when even the most patient investors experience unrealized losses correspond to the late stages of bear markets characterized by widespread pessimism and depressed valuations—essentially marking the market’s deepest downturn.
According to the chart, these negative phases have consistently preceded every major Bitcoin bull run in the past. Each time the indicator fell below zero, late-stage capitulation dynamics unfolded, including seller exhaustion, reduced distribution pressure, and the transfer of coins to stronger hands. In other words, rather than signaling structural weakness, these phases represented a reset period in which excessive speculative positions and leverage were flushed out, forming the foundation for the next cycle bottom.
Wedson emphasized that true opportunities lie in these bleak downturns rather than in times of abundant profits. Previous bull markets began not when long-term holders were comfortably in profit, but only after losses had deeply spread among them. With the indicator still positive at 0.36, the current situation suggests—based on historical precedent—that the final capitulation phase preceding the next bull run has not yet arrived.
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