Key Takeaways
Bitcoin’s (BTC) recent downturn, following its all-time high of $108,364 on Dec. 17, has sparked concerns about the start of a bearish trend.
The latest peak, a 57% increase from the previous cycle’s high, was reached in just 1,134 days—shorter and less robust than the prior cycle, which saw a 250% gain over 1,428 days.
Since hitting its peak, Bitcoin has slid 14%, stirring fears among investors. While many on-chain indicators suggest the bull run may still have room to grow, other metrics—such as the age of market participants and levels of unrealized profits—are signaling caution, hinting at a possible cycle end.
With these conflicting indicators and mounting uncertainty, we turn to the data to uncover what the future might hold for Bitcoin.
Bitcoin’s Net Unrealized Profit/Loss (NUPL) indicator is a key tool for gauging market sentiment, revealing how much unrealized profit or loss exists relative to the market cap. A high NUPL typically signals euphoria, often coinciding with the peak of market cycles.
The long-term holder (LTH) NUPL has been especially reliable at predicting cycle tops.
Historically, during each cycle’s peak, the LTH-NUPL surged above 0.75 and stayed there until Bitcoin reached its all-time high. In 2017, the LTH-NUPL hovered above 0.7 for over six months, topping out at 0.97. Similarly, in 2021, it stayed above 0.75 for four months, peaking at 0.91.
In December 2024, as Bitcoin reached its all-time high, the LTH-NUPL crossed the 0.75 mark again. If this cycle mirrors previous ones, Bitcoin could continue its ascent for another 4-6 months before a correction begins.
The current LTH-NUPL reading suggests that Bitcoin may now be in the final stretch of its upward movement in this cycle.
The Realized Cap HODL Wave is an on-chain indicator that visualizes the age of Bitcoin transactions.
Historically, Bitcoin market cycle tops have happened when short-term holders (STH) create most of the activity. In both previous cycle tops, short-term holders for up to 3 months accounted for over 70% of the activity.
In general terms, this means that short-term speculators dominate the market, while long-term holders with convictions have exited it. This also aligns with the LTH-NUPL indicator, which measures the profitability of these same long-term holders.
Currently, short-term holders account for over 50% of the market activity. While this is a higher high relative to March 2024, it is well below the 2017 and 2021 highs.
However, STH activity is creeping up and could cross the 70% threshold during another BTC upward movement.
Finally, the Block Subsidy model uses moving averages (MA) related to the cost of production (thermocap) to determine how much the asset’s value surpasses its production costs. This is done by comparing the market capitalization to multiples of the thermocap.
The previous Bitcoin market cycle top happened above the 32x Thermocap line, while the one preceding it was above the 62x line (red). This shows diminishing returns and could mean the current cycle will end even below the 32x line.
The BTC price reached the 32x trend line during the all-time high but did not break out. If the pattern of diminishing returns holds, the Bitcoin price might have already reached the top or is very close to doing so.
Out of the three on-chain indicators, the Block Subsidy model is the most bearish, suggesting Bitcoin may have reached its top.
The HODL wave indicator is confident in predicting another high, while the LTH-NUPL leans bullish but does not completely rule out a top at the current level.
In any case, Bitcoin seems to have at most another upward movement left before beginning a bearish trend.