The debate around the Bitcoin bottom signal has resurfaced as a widely tracked on-chain indicator approaches a level that previously marked major turning points in the market.
While Bitcoin is currently trading near $74,220, up 1.3% in the past 24 hours, long-term data suggests the market may not have fully completed its correction phase.
This divergence between price recovery and underlying sentiment is now shaping expectations for the next phase of the cycle.
Understanding the NUPL Indicator
At the center of this analysis is the Net Unrealized Profit/Loss (NUPL) metric, an on-chain indicator that measures whether Bitcoin holders, on average, are sitting on profits or losses.
Unlike short-term price indicators, NUPL reflects the emotional state of the market, showing when investors are experiencing euphoria or capitulation.
Historically, deep resets in NUPL have aligned with major Bitcoin cycle bottoms.
A Pattern Seen Across Three Cycles
Looking at the monthly chart, the same pattern has repeated across multiple bear markets.
Bitcoin’s major bottoms in 2015, 2018, and 2022 all formed when the NUPL indicator dropped into deeply negative territory and touched a long-term ascending trendline.
Each of those moments coincided with extreme pessimism, when market participants had already absorbed heavy losses and sentiment was largely exhausted.
These conditions often signal that selling pressure has been largely depleted.
Current Reading Suggests Incomplete Reset
The current NUPL reading stands at 22.9, indicating that, on average, holders are still in modest unrealized profit.
However, this level also reflects a significant decline from the gains accumulated during Bitcoin’s rally to its October 2025 peak above $126,000.
The data suggests that while the market has corrected, it may not yet have reached the same level of emotional capitulation seen in previous cycle lows.
Analyst View: Another Move May Be Needed
According to crypto analyst CrypFlow, the NUPL indicator is approaching the critical zone that has historically marked Bitcoin bottoms.
If the pattern holds, the market could still require a deeper sentiment reset before establishing a long-term floor.
This does not necessarily imply an immediate decline, but it highlights that the current structure may still be part of a broader consolidation or correction phase.
Market Reaction Remains Cautious
Despite Bitcoin’s move back above $70,000, investor behavior remains measured.
The Fear and Greed Index has improved, signaling a shift away from extreme fear, yet confidence has not fully returned.
This cautious sentiment reflects uncertainty about whether the recent price recovery represents the start of a new uptrend or a temporary rebound within a larger cycle.
Psychology of a Late-Stage Correction
Market cycles often end not with gradual stabilization, but with capitulation events that force weaker hands out of positions.
The NUPL indicator suggests that this phase may not be fully complete.
Investors who endured the earlier decline may still be holding positions in slight profit, reducing the urgency to sell and delaying the final reset typically seen at cycle bottoms.
What Comes Next for Bitcoin
If NUPL continues to decline toward its long-term trendline, it could signal the final stage of the current correction.
Alternatively, if the indicator stabilizes without reaching those historical levels, it may indicate that market structure is evolving and that past patterns are becoming less predictive.
Either scenario places increased importance on monitoring on-chain data alongside price action.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are volatile and risky. Always conduct your research before making any investment decisions
