An analyst from cryptocurrency analysis company CryptoQuant discussed Bitcoin's potential to transition from a bear market to a bull market in a recent analysis.
The analysis was based on three important indicators: Net Unrealized Profit/Loss (NUPL), MVRV Ratio and Puell Multiple. These indicators play an important role in deciphering Bitcoin's market cycles and point to interesting developments in the course of BTC at the moment.
CryptoQuant Analyst: “Data Shows that the Bear Effect is Reducing, the Bull is Strengthening”
NUPL is used as a measure of the profit or loss situation of the market. A rising NUPL indicates an increasingly profitable market, moving from neutral to 'greedy', often correlating with bullish sentiment. NUPL's current trajectory indicates an increase in market optimism, which according to the analyst is a typical harbinger of a bull market.
MVRV Ratio compares Bitcoin's market value with its realized value. A low MVRV ratio often indicates undervaluation, which is common in bear markets. The recent upward movement in the MVRV ratio from these low levels may indicate the beginning of a bull cycle, indicating that the market has moved from undervaluation to a phase where growth is expected.
The Puell Multiple metric relates Bitcoin's daily dollar launch value to its 365-day moving average. Historically, Puell Multiple lows have signaled market bottoms, indicating optimal buy points and the potential for an upcoming bull run, according to the analyst. According to the analyst, the gradual increase of this coefficient from low levels can be interpreted as a decrease in selling pressure and increased profitability for miners and may be in line with the potential beginning of a bull cycle.
As a result, the analyst thinks that the current values of NUPL, MVRV Ratio and Puell Multiple collectively suggest that the bear market for Bitcoin may be waning and heading into the early stages of a bull cycle.
However, it is important to remember that corrections in prices are always possible and other economic factors can significantly affect market behavior.
*This is not investment advice.
