Mr. Berg's Analysis> When loss-makers start to hold back from selling, it is a signal of the BTC cycle bottom.

Mr. Berg uses Glassnode’s RUP and RUL on-chain profit/loss curves to show that when the market as a whole falls into losses and profit-taking selling pressure dries up, supply will decline—and this is the common cause behind every previous BTC cycle bottom. Currently, RUL is just one step away from crossing above RUP and triggering the signal. This article is a collaboration between on-chain data analyst Mr. Berg (@market_beggar) and the Dynamic Zone Trend Academy Project.
(Previous context: Mr. Berg’s analysis >> How to catch the true BTC super bottom? Two “high-probability” market-cost bottom signals)
(Background supplement: K33 Research: Bitcoin long-term holders reach 79%—an all-time high! Selling-pressure exhaustion hints that the bear market is nearing its bottom)

From the perspective of behavioral finance, market participants usually show an irrational tendency: “Selling profitable positions too early, while refusing to exit positions that are at a loss.”

Given that premise, we can readily infer: “If most market participants are in a loss state, the proportion of selling coming from profit-takers will drop sharply (reduced supply).”

RUP and RUL: Quantifying market profit and loss with on-chain data

As shown in the accompanying figure:

🟩 Green line = RUP (Relative Unrealized Profit, relative unrealized profit)
🟥 Red line = RUL (Relative Unrealized Loss, relative unrealized loss)
🔉 Signal = RUP < RUL (the red line crosses above the green line)

We all know: price is determined by supply and demand. The core principle behind bottom formation is inseparable from the following two situations:

• Surge in demand: Buying volume far exceeds the amount being sold, commonly seen in “interim bottoms.”
• Decline in supply: Selling-side pressure drops dramatically, appearing at every BTC cycle bottom.

Based on on-chain data, RUP and RUL calculate the market’s total unrealized profits and losses, and then standardize them according to the market cap at the time—so they can be regarded as reflecting the overall profit/loss condition of the market.

If RUL > RUP, it indicates that the market as a whole is in a loss state. Then the human nature of “loss-bearers being reluctant to sell” can greatly reduce market supply—this is the underlying principle of “buying when nobody is interested.”

Back to the present: only one step away from the signal being triggered

With time now at the present moment, although RUL has not yet crossed above RUP, it is only one step away. Perhaps you’re growing increasingly disappointed by BTC’s repeated plunges, but from an objective data standpoint, dawn is not far off.

Just wait for the flowers to bloom.

※ This article is a collaboration between the Dynamic Zone Trend Academy Project and on-chain data analyst Mr. Berg (@market_beggar). It represents only the author’s personal views and does not constitute any investment advice.