Is Bitcoin Currently in the Mid-Cycle? On-Chain Analyst Interprets NUPL-MVRV Indicator

On-chain analyst Axel Adler Jr. released a Bitcoin NUPL-MVRV harmonized composite indicator on March 7th, with a value of 0.33, suggesting that Bitcoin is currently in the middle stage of this market cycle. This value is significantly higher than the levels commonly seen near -0.50 at previous cycle bottoms, implying that the market has not yet entered an area of extreme pessimism.

NUPL (Net Unrealized Profit/Loss) measures the ratio of the overall unrealized profit and loss of all Bitcoin holders to the total market capitalization, while MVRV (Market Value to Realized Value) compares Bitcoin's current market capitalization to the average cost of all its circulating coins. Combining the two into a composite indicator can effectively filter out the noise of a single indicator and provide a clearer signal for cycle positioning.

The trend of this indicator since 2013 shows that historical cycle bottoms often appear in the negative zone. For example, in 2015, 2019, and 2022, there were obvious dark red or pink low points, and a new bull market started after reaching -0.50 or lower. It is worth noting that the cycle bottoms in recent years have shown a gradual upward trend – the bottom in 2022 only slightly dipped to -0.50, far from reaching the extreme levels of 2015. If this trend continues, the future new cycle bottom may no longer touch the old threshold of -0.50, but may stabilize around -0.20. This means for investors who rely on historical extreme sentiment as a buy signal: even if the market looks "not so bad," it may still be at the real cycle low. The current reading of 0.33 is located between the zero line and the historical top area (>0.80), which is a typical mid-term recovery phase. The market has recovered from panic but has not yet entered the frenzied final stage. Adler pointed out that a comprehensive market clearing has not yet been completed, but the current position is no longer at the end of the early bear market, and investors can regard this as a key node for observing the evolution of market sentiment.