A significant bullish divergence appears to be emerging for Bitcoin and Ethereum, as an on-chain indicator reveals that traders are currently selling their BTC and ETH at a slight loss.
The indicator in focus is the “Net Realized Profit/Loss” (NRPL), which meticulously tracks the net profit or loss experienced by investors through their selling activities.
Santiment, a prominent on-chain analytics firm, has analyzed the blockchain history of each coin being sold to determine the price at which it was last moved. If the previous selling price was lower than the current spot price, the sale is considered profitable, while a higher selling price implies a loss. By summing up all profits and losses, the NRPL calculates the overall difference.
Bitcoin And Ethereum Show Bullish Divergence As NRPL Turns Negative
Recent data from Santiment unveils a negative turn in the NRPL for both Bitcoin and Ethereum, indicating that on average, investors in these leading cryptocurrencies have been selling their coins at a loss during the given period. However, these losses have been relatively minor, as the price movements of these assets have not been substantial. Typically, major sell-offs resulting in significant losses tend to occur during extended drawdowns.
Historically, when the NRPL ventures into negative territory, it often acts as a signal for a potential price jump. This trend suggests that weaker hands are exiting the market, while investors with stronger conviction eagerly acquire the coins being sold.
Santiment highlights an intriguing bullish divergence between the NRPL trend and the prices of Bitcoin and Ethereum. This divergence could potentially pave the way for an increase in the prices of these cryptocurrencies. However, considering the current level of loss-taking remains modest, the likelihood of a substantial price surge remains limited. Nevertheless, this development presents a positive indication for Bitcoin and Ethereum.
Interestingly, a similar pattern was observed prior to the Bitcoin rally that saw it surpass the $30,000 mark. During that period, investors were also selling at comparable levels of losses, showcasing the potential influence of this pattern on prices.
The market will closely monitor the ongoing divergence between the NRPL and prices as it holds the potential to signify a shift in sentiment and potential price movements for Bitcoin and Ethereum in the near future.