The bear market is retreating, but Bitcoin has not yet increased – What is the reason for this?

Bitcoin (BTC) has had an unusual "performance" this week. While the entire crypto market is falling more than 5% in just one day, the price of BTC has only slightly decreased by 0.2%, maintaining around the mark of 118,500 USD.

The sideways performance during a weak crypto market is often a sign that the buyers are in control. However, even though the selling pressure is clearly decreasing, Bitcoin has yet to break out; and at this moment, the price rally has not occurred. So what is the reason for this?

The significant drop in taker sell volume indicates that the bears have retreated

One of the clearest signals indicating that the sellers are retreating is the sharp decline in the sell volume of taker (taker sell volume). On July 25, this volume peaked at nearly 17.8 billion USD. And since then, this figure has decreased by nearly 93%, now standing at around 1.2 billion USD at the time of writing.

The strong decline in selling pressure from the taker indicates that the bears are no longer the driving force in the market.

Bitcoin price chart and taker sell volume | Source: CryptoQuantUsually, when sellers disappear and the price remains stable, it is an ideal foundation for an upward momentum to form. But with Bitcoin, the price is still stagnant. This does not weaken the bullish argument, but rather means that the increase is only temporarily delayed. What is missing is a suitable "catalyst."

The selling volume of the taker reflects the value of transactions where the seller is the active party, meaning when they execute a market sell order against pending buy orders. A decrease in this indicator suggests that the number of traders wanting to sell off quickly is decreasing, reflecting a weakening fear sentiment or that the selling side is gradually exhausting.

NUPL continuously reaching peaks leads to profit-taking behavior

The missing catalyst may come from psychological factors, and the Net Unrealized Profit/Loss index (NUPL) can help explain this. NUPL is an indicator used to measure the amount of unrealized profit in the system, allowing speculation on when investors might be ready to sell to take profits.

In the past two weeks, Bitcoin has tested the price range of 119,000–120,000 USD several times, specifically on July 14, July 17, July 22, and July 27. Each time, the NUPL indicator reached a peak in the range of 0.57–0.58, and the price of BTC failed to break through this level, subsequently reversing for a correction.

This is not a coincidence. The market is signaling that the 119,000–120,000 USD range has become an important profit-taking zone.

Bitcoin price chart and NUPL indicator | Source: CryptoQuantAccording to data from CryptoQuant, after the most recent rejection, the NUPL indicator has slightly fallen while the price has remained almost unchanged. This indicates that some profit-taking activity has occurred. Traders have realized profits around the 120,000 USD area and currently the market is in a phase of "digesting" those fluctuations without a new wave of sell-offs.

The NUPL indicator compares the market capitalization of Bitcoin with the realized cap (, aimed at reflecting the unrealized profit that holders are holding. When NUPL is high, the incentive to take profit will be stronger. Conversely, in the case where NUPL decreases while the price remains stable, it indicates that the market has somewhat "offloaded" and may be ready for a new uptrend.

This is an important price level for Bitcoin!

Although there have been many efforts to break the $119,000 level, it has not succeeded, and the price of BTC remains above important support levels at $117,000 and $118,000. These price levels are reinforced by the Fibonacci retracement levels of 0.382 and 0.5 – both of which have been tested multiple times and still hold strong.

The seller has withdrawn, but the buyer still cannot push the price above the resistance area.

![])https://img-cdn.gateio.im/webp-social/moments-cf9a656fddeb3e63f7ebf68fa476a375.webp(Bitcoin Price Analysis | Source: TradingViewWhat is holding Bitcoin back – both technically and psychologically – is the resistance level of 120,000 USD. This is not only the position of the Fibonacci 0.786 level but also where the NUPL index reached its most recent peak. As long as BTC does not decisively break through this area, the price increase will remain delayed.

In the event that the 120,000 USD mark is broken, the price structure will quickly expand. BTC could advance to 122,000 USD, or even higher. With the selling pressure having dissipated, a portion of profits has been realized and the support zone remains solid, the conditions for the next bullish phase of Bitcoin are still present and only require one final push.

However, the short-term bullish argument will fail if the price of Bitcoin falls below 117,000 USD. At that point, the support area will be broken, opening up the possibility of BTC dropping to 114,000 USD, and the entire trend structure will shift to a bearish direction.

Itadori