The Setup Is Forming, But the Signal Isn’t Triggered:
The adjusted NUPL for long-term holders (LTHs) is approaching a critical inflection point, but history suggests the final phase of the cycle is still incomplete.
Across prior cycles, Bitcoin market bottoms have consistently formed only once LTHs were pushed into net unrealized losses, a phase where conviction is tested and capital undergoes sustained stress, typically lasting between 6 (2020 flash crash) and 277 days.
In the current cycle, we are witnessing a rapid compression in profitability. Since the October 6th, 2025 peak, LTH profitability has collapsed from 58% to just 3% in 142 days. This is a sharp and aggressive reset, reflecting a meaningful deterioration in investor positioning and sentiment.
However, despite this drawdown, LTH-NUPL remains marginally above zero.
This is key.
It signals that, while stress is elevated, the cohort has not yet entered the broad capitulation zone historically required to establish durable market bottoms. In other words, capital is uncomfortable, but not yet forced into loss realization.
This distinction matters. Market bottoms are not formed when investors are merely pressured, they form when investors are structurally underwater after watching their accumulated gains fully evaporate and their positions turn into losses.
Until LTHs transition decisively into negative NUPL territory, the probability of a premature bottom remains elevated. The current environment resembles a late-stage stress phase rather than full capitulation.
The opportunity is forming, but the signal has not yet been triggered.
[What to Watch]
Watch for a sustained move of LTH-NUPL below zero accompanied by prolonged compression in price and volatility. This would indicate forced stress and potential capitulation, conditions historically aligned with asymmetric entry points.
Written by MorenoDV_