Bitcoin has recently reached an all-time high (ATH) of $104,087, but it is currently struggling to break past the $100,000 barrier. Investors are cautiously optimistic about the future of Bitcoin, but there is concern that the market may be at a tipping point, where a decline could follow if BTC fails to hold above this level.
The market sentiment for Bitcoin is currently marked by high risk, as indicated by the Net Unrealized Profit/Loss (NUPL) metric. The NUPL has surpassed 0.59, which is one standard deviation above the 4-year average. This indicates extreme unrealized profit, which often correlates with market euphoria. High levels of NUPL are typically followed by significant corrections as investor optimism may turn into profit-taking.
The NUPL reading signals that the Bitcoin market may be overheating, leading to increased sell pressure. When the market becomes overextended, prices can quickly shift from bullish to bearish as more investors begin to realize their profits. The risk of a correction in the coming weeks remains high as long as NUPL remains above the danger zone.
Realized profits have shown signs of decline over the past few days, reflecting a cautious outlook among investors who are waiting for more clarity on the direction of the market. Glassnode noted that daily realized profits peaked at $10.5 billion during the run-up towards $100,000, but have since declined to around $2.5 billion per day, signaling a reduction in profit-taking activity.
Bitcoin’s price is currently range-bound between $100,000 and $89,800, with volatility expected to continue. If BTC manages to break above $100,000 and establish it as a support level, the price could trend higher, potentially approaching $105,000 in the coming weeks. However, if Bitcoin fails to sustain momentum above $100,000, a retest of the $89,800 level is likely.
In the current market environment, Bitcoin’s ability to reclaim and maintain the $100,000 level is crucial. While the overall sentiment remains bullish, the high NUPL suggests the risk of a correction is real. Investors should stay cautious and keep an eye on key support and resistance levels to navigate the market effectively.
