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- Despite $800B wiped out, Bitcoin’s NUPL shows holders remain in profit, signaling incomplete emotional capitulation.
- Market structure is cleaner, but sentiment resilience hints at another potential shake-out before true recovery.
The recent major crypto market crash has indeed devastated many investors. Data from XWIN Research Japan shows that a total of $19.2 billion in positions and nearly $800 billion in market value have been wiped out.
Historically, this is one of the largest leverage cleanup phases ever recorded. But interestingly, although the market has been mechanically “cleaned,” emotionally, it has not fully recovered.
Bitcoin’s NUPL Suggests the Market Isn’t Emotionally Reset Yet
According to XWIN Research Japan, the Net Unrealized Profit/Loss (NUPL) indicator is key to understanding the current market cycle. In March 2020 and November 2022, the NUPL fell below zero, indicating a net loss for the majority of investors.
This level used to mark the point of capitulation, when everyone gave up and the market eventually reversed. However, now, the NUPL remains around 0.5. In other words, many Bitcoin holders are still enjoying profitable positions.
What does this mean? Although leverage has been eliminated, there are no signs of the mass panic that typically precedes major cycle bottoms.
“Structurally, the market is clean, but psychologically, it’s not,” said the analyst.
Furthermore, the long liquidation chart also shows extraordinary intensity. Excessive long positions have been cleared, derivative metrics have returned to normal, and open interest has fallen sharply. However, because the NUPL remains positive, there is still potential selling pressure from investors seeking to secure profits.
According to XWIN, this pattern is usually only the first phase before a further shakeout, a phase where fear truly peaks before the market begins to recover.
Derivatives Data Drops Sharply, But Sentiment Hasn’t Collapsed
Based on CoinGlass derivatives data, the market does feel much quieter. Daily trading volume plummeted 67.95% to $86.38 billion, while open interest only fell 0.06% to $70.06 billion.
Options volume also shrank 53.69% to $7.06 billion. This significant drop suggests excessive leverage has been removed from the system, but it doesn’t necessarily mean the market is ready to rise again.
At the time of writing, Bitcoin was trading at about $111,225, up 1.30% in the last 4 hours, but still down 1.23% in 24 hours and 9.11% in the last 7 days.
On the other hand, a few days ago, CNF reported that investor sentiment on Binance is starting to improve, with the market’s “emotional strength” recovering as the price broke above $120,000.
One analyst even saw the potential for a test of the $125,000–$130,000 area if this optimism persists over the next two weeks. Selling pressure from whales is also said to be easing, indicating a re-accumulation phase could be underway.
Furthermore, the Short-Term Output Profit Ratio (SOPR) data, which remains at 1.02, indicates that short-term holders are still making profits.
Typically, as long as the SOPR hasn’t broken through the 1.04 level, the market is considered to be in a healthy zone—not too hot, but not completely cold either.
