Despite the pessimistic atmosphere that has prevailed in the cryptocurrency market in recent weeks, Bitcoin has not completely lost its chance of recovery. While price pressure continues, on-chain data does not yet confirm that the bears have fully taken control of the market. On the contrary, some indicators that indicate that the bulls are still in the game reveal that Bitcoin is still searching for direction. This indicates that the market may be in a fluctuating equilibrium process rather than a sharp break in the short term.
On-Chain Indicators Keep Bitcoin at the Crossroads
Bitcoin’s Net Unrealized Profit/Loss (NUPL) metric plays a critical role in understanding the psychology behind current price movements. Adjusted NUPL data, which compares costs to market value for short- and long-term investors in particular, has reached a level historically associated with exits from long periods of decline. This area is often described as the area of ”fear and anxiety”.
However, this level alone does not mean a clear trend reversal. On the contrary, it shows that investors continue to hold their Bitcoins without making a significant profit or loss. This suggests that there is still no strong capitulation in the market. If profit or loss realizations accelerate in the coming period, this may increase sales pressure in the short term and especially lead to strengthening of short positions. Therefore, Bitcoin is currently at a delicate balance point where bulls and bears cannot establish a clear advantage.
What Do Risk Indicators and Market Dynamics Say?
The Sharpe Ratio, which measures risk-adjusted returns, also produces remarkable signals. The rate dropping below zero has been rare since 2018. Historically, this region has been observed close to the formation of market bottoms. This shows that the possibility of a possible recovery is increasing. However, this signal does not offer a definitive bottom confirmation; There were also periods when the Sharpe Ratio could remain at low levels for months.
In addition, Bitcoin reserves in exchanges also give important clues about the short-term outlook. According to the latest data, exchange reserves increased from 2.71 million BTC to 2.73 million BTC. This increase suggests that investors are moving their assets to the stock exchanges, making them more open to sales, and that short-term pressure may continue. However, it is too early to say that the long-term structure has completely collapsed.
On the other hand, non-Bitcoin developments in the market also attract attention. The fact that institutional interest in spot Bitcoin ETFs in the USA has continued, albeit fluctuating, in recent days stands out as an important factor that keeps long-term expectations alive. Despite the limited outflows experienced on some days, the fact that large funds continue to see Bitcoin as a portfolio diversification tool creates a different news headline that supports the market perception.
As a result, Bitcoin has not yet established a clear direction. While on-chain data opens the door to a potential recovery, short-term selling pressures require caution. In the coming period, both macroeconomic developments and ETF flows will determine in which direction this fragile balance will be disrupted.
