Anika Begay
After the general market collapse caused by the fall in the Japanese stock market, BitcoinThe largest cryptocurrency, has consistently seen significant price swings, sparking speculation about a massive price drop as several key metrics have turned bearish, indicating a possible prolonged decline.
Bitcoin Could See a Bearish Move to $40,000
As Bitcoin continues to demonstrate bearish momentum, Grizzly, a technical and on-chain analyst, who has been navigating the recent price action of Bitcoin has released a conservative forecast, which states that BTC could fall further to around $40,000. The market expert’s grueling prediction for the cryptocurrency is based on the crucial NUPL (Net Unrealized Profit/Loss) metric.
It is worth noting that the NUPL metric is a tool to determine the distinction between relative unrealized profit and relative unrealized loss. In simple terms, the tool here illustrates the mood of investors and what Bitcoin Owners who wish to sell their goods either make money or lose money.
When the NUPL is high, it suggests that a significant portion of the market is taking profits, which can lead to pressure to sell or buy. profitsOn the other hand, when NUPL is low, it means that most market participants are losing money, thus encouraging further buying or bullish sentiment.
According to the analyst, the current readings of the NUPL parameter are entering a range that usually signals the beginning of a price decline for Bitcoin, as it is currently positioned near a critical level of 0.4, indicating a probable downward trajectory.
The 0.4 level has historically been a major support and resistance level, and according to the data, a break below this level often signals the start of a massive downtrend. If the index continues its downtrend, Grizzly is confident that the bears could take complete control of the market.
As a result, the expert predicts a sharp decline for BTC around $40,000 in the near term. While the analyst expects a price decline due to the NUPL metric, he stressed that the magnitude of the current downswing is not yet strong enough to definitively signal the end of the uptrend.
BTC Sees a Slight Bounce
Given the volatile nature of Bitcoin, Grizzly’s analysis serves as a warning to cryptocurrency investors about potential price instability for the cryptocurrency in the near future.
Currently, the digital asset is showing a healthy movement, after witnessing a slight recovery at the $56,632 level. BTC may have bounced to $58,531, but over the past week, the flagship coin is still down more than 3%.
Despite the overall market sentiment being bearish, there is still room for further gains for the asset as its daily trading volume increased by more than 6%, suggesting optimism among investors.
Featured image from LinkedIn, chart from Tradingview.com
