Crypto analyst Joao Wedson, founder and CEO of Alphractal, has identified a critical on-chain indicator that historically signals the beginning of a new Bitcoin bull market. According to Wedson, the market must watch for the Long-Term Holder Net Unrealized Profit/Loss (NUPL) metric to turn negative before a sustained upward wave can begin.
Currently, the NUPL value for long-term investors stands at 0.36, indicating that this resilient cohort of the market is, on average, still holding their Bitcoin at an unrealized profit. This metric measures whether investors' holdings are valued above or below their acquisition cost, with long-term holders' positioning considered a crucial gauge of market cycle stages.
Wedson's analysis, presented in a chart published on February 16, 2025, emphasizes that the true bullish signal emerges when this metric dips below zero. Historically, such a shift signifies a "maximum depression" phase in the market, where even the most patient, long-term investors are sitting on unrealized losses. This period is characterized by seller exhaustion, the transfer of coins from weak to strong hands, and the laying of a foundation for a new cycle.
The chart visualizes this pattern, with red zones marking periods where the NUPL was negative. Each prior major Bitcoin bull run began only after the metric entered this negative territory, following a phase of late-stage capitulation that cleared out excess leverage and speculative positioning. With the current reading still positive at 0.36, Wedson's framework suggests that, based on historical precedent, the final capitulation phase preceding the next bull market has not yet occurred.
