Several bearish indicators flashed bad signs in the past days, bug luckily long-term Bitcoin holders aren’t selling.
The current hesitation to sell shows a strong sense of confidence among these holders.
Warning signs on the horizon, but they’re strong enough?
As many experts warn, the Net Unrealized Profit/Loss, the NUPL metric, which shows whether investors are sitting on profits or losses, has started to shown signs of decline.
A drop in this metric is often an early warning that the market is inching closer to a bear phase.
The crypto market has endured several bear markets, correlating with the Bitcoin halving cycles, with one of the most severe occurring in 2022.
That downturn was started by the collapse of FTX exchange, which triggered a domino effect impacting hedge funds and lending platforms, causing almost total collapse. The community called it crypto winter.
There is a speculation that the market might be transitioning into another bear phase.
Many cryptocurrencies have struggled since Bitcoin reached its peak earlier this year, leading to concerns that the market could be heading into a longer period of declining prices. That wouldn’t be an ideal situation for many.
There are cycles, but where are we on the chart now?
The market cycle psychology chart offers insights into potential future trends.
This chart outlines the various stages of a market cycle, from the disbelief that marks the end of a bear market to the euphoria that often precedes a downturn.
Now some analysts believe that the market is in between the complacency and anxiety stages. But these two comes before a bear market.
Of course, not everyone is convinced that a bear market is coming. Yes, there are concerning signs, but there are always concerning signs if we look strong enough.
Ethereum’s struggles, even in the wake of the launch of spot ETFs, raised doubts about the market’s overall strength.
The market is complex
The primary rule is that the market is multifaceted. Some cryptocurrencies are lagging, but the market could still be in a bullish phase.
Market watchers are also paying close attention to the behavior of crypto whales, those holding large quantities of Bitcoin.
Some whales temporarily halted their buying, this is not unusual during a bull cycle.
Next to this, if the NUPL metric continues to decline, it could increase the likelihood of an incoming bear market. Time will tell.
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