More Bear Market? Analyst Looks at Three On-Chain Models That Signaled Bitcoin (BTC) Bottoms in Previous Cycles

A widely followed crypto analyst says that three key models are flashing signs that Bitcoin’s (BTC) bear market woes may have longer to go.

In a new strategy session, Nicholas Merten, the host of DataDash, tells his 512,000 YouTube subscribers that three models that have accurately predicted BTC’s bottom in the past aren’t pointing toward a recovery anytime soon.

First, the trader points to the net unrealized profit/loss (NUPL) metric, which divides Bitcoin investors’ unrealized profit or loss by the BTC market cap.

“All three of the bottoming indicators are still not showing any clear signs of recovery or strength. We got the net unrealized profit/loss, one of our favorite models here, still sitting in capitulation territory but still far away from what we’ve seen in previous bear markets.”

The trader then brings up the supply in profit metric, which measures the amount of BTC that are currently in the green.

“In a typical, normal Bitcoin bear market, we come down to a point range of about 45. Right now, we’re sitting at 51 with a recent low at 49. We have yet to get there just yet.”

Merten also mentions hash ribbons, an indicator that aims to show when BTC miners have capitulated, generally because their cost of operating is higher than their mining rewards.

“To make matters worse, we have not seen real miner capitulation. Not even the typical kind of capitulation we see in a normal bear market. With how bad things are right now, with how low Bitcoin’s price is compared to the average cost of miners, these companies are burning through cash in order to extract Bitcoin that’s worth a fraction of the cost of their mining and electricity.

There needs to be a massive consolidation. There will be a lot of sell side pressure that is just going to make things worse here in the near term before they get better. It’s simple supply and demand.”

Bitcoin is changing hands for $16,595 at time of writing, a fractional gain on the day.

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