Bitcoin’s recent price action has continued its upward trajectory, with the asset trading as high as above the $120,000 price mark in the past 24 hours. The move suggests persistent bullish momentum following a period of sharp decline earlier this week. As the price inches closer to its all-time high, on-chain data is starting to paint a picture of solid transactional support behind the price movement. In particular, analysts have begun highlighting a divergence between Bitcoin’s market value and its underlying network activity. One such observation comes from CryptoQuant analyst Sunflowr Quant, who shared insights in a recent QuickTake post examining the unusual behavior of the NVT Golden Cross indicator. This metric, typically expected to rise in tandem with price due to its function as a ratio between market cap and transaction volume, is currently declining, which Sunflowr attributes to a significant uptick in on-chain activity. Related Reading: Bitcoin Rally Not Over Yet? Short-Term Holder MVRV Suggests Further Upside Bitcoin On-Chain Growth Suggests Underlying Network Strength According to Sunflowr, this inverse correlation between the rising BTC price and falling NVT Golden Cross may indicate that the current rally is driven more by actual usage and real transactions on the Bitcoin network rather than speculative trading. “A decline in the NVT ratio during a price increase implies that the transaction volume is rising at a faster pace than the market cap,” he wrote. “This can be interpreted as a sign that the rally is supported by real economic activity.” This observation aligns with the broader sentiment that healthy on-chain growth can serve as a foundation for more sustainable price increases. If transaction volumes are growing organically and not solely from derivatives speculation, it suggests that user adoption and financial utility are contributing to the price strength. Investors closely watching these indicators may find this a favorable environment, though caution remains as other metrics hint at evolving market dynamics. Holder Rotation Signals Potential Shift in Market Participation A separate analysis from CryptoQuant analyst IT Tech sheds light on another dimension of Bitcoin’s current market structure: holder behavior. In a post titled “Holder Rotation,” IT Tech notes that long-term holders, those who have held BTC for more than 155 days, have recently begun net distribution, meaning they’re selling more than accumulating. Conversely, short-term holders are showing net accumulation behavior once again, a dynamic often seen in late-stage rallies. This shift between long-term and short-term holders has historically served as a warning signal. Similar handoffs were observed in April 2021 and November 2023, both of which preceded local tops or cooling phases. While this doesn’t necessarily confirm a reversal, it highlights the need to monitor supporting metrics such as exchange inflows and funding rates. Related Reading: Bitcoin Trades Above $117K as Whale Deposits Decline and Stablecoin Inflows Rise “It’s a classic profit-taking pattern from seasoned wallets, while newer market participants may be entering due to rising prices,” IT Tech wrote. Featured image created with DALL-E, Chart from TradingView Source: newsbtc.com (Read Full Article)

The on-chain analytics firm Glassnode has revealed an Ethereum indicator that reliably flagged the price bottom in advance of the recent rally. Ethereum NUPL Fell Into Capitulation Zone Earlier In a new post on X, Glassnode has talked about an Ethereum indicator from its joint report with cryptocurrency exchange Coinbase. The metric in question is the “Net Unrealized Profit/Loss,” which measures, as its name suggests, the net amount of profit or loss that the investors of the asset as a whole are holding right now. Related Reading: XRP MVRV Ratio Flashes Signal That Last Led To 630% Surge The metric works by going through the transaction history of each coin on the network to see what price it was last moved at. If this previous transfer value was more than the current spot price for any token, then that particular token is assumed be in a state of net unrealized loss. Similarly, a coin with a cost basis below the latest price is considered in profit. The NUPL sums up the degree of profit/loss involved in both cases and calculates the difference between them. When the value of the indicator is positive, it means the investors as a whole are sitting in a state of net unrealized profit. On the other hand, it being under the zero mark implies the dominance of loss in the market. Now, here is the chart shared by the analytics firm that shows the trend in the Bitcoin NUPL over the past few years: As is visible in the above graph, the Ethereum NUPL observed a significant decline earlier in the year when the asset’s price plummeted. In this plunge, the indicator went down to around -0.2, which suggests investors dipped into a net state of loss. Not just that, the level of relative unrealized loss present on the network was notable enough for the sentiment to be flagged as “capitulation” under Glassnode’s methodology. Related Reading: Bitcoin Sees Influx Of New Capital: First-Time Buyers Add 140,000 BTC Often, cryptocurrency markets move in the direction that the crowd least expects, so the presence of a high amount of loss can lead to a bottom. From the chart, this seems to be what occurred when the NUPL dropped into the capitulation zone. With the price surge that has followed since this low, sentiment among Ethereum investors has naturally marked an improvement. The NUPL may be to keep an eye on, however, as once the balance shifts overwhelmingly towards profit, another shift in the market could become probable: this one to a downtrend. ETH Price Ethereum has broken away from Bitcoin as its price has jumped by more than 20% over the past week, reaching the $3,600 level. Featured image from Dall-E, Glassnode.com, chart from TradingView.com Source: newsbtc.com (Read Full Article)