Original Title: "Revisiting RUP Divergence Signals: Principle Analysis with Current Market Conditions as an Example & Subsequent Scenario Interpretation"
Original Author: Mr. Beig, On-chain Data Analyst
I. The Principle of RUP Divergence as a Top Signal
The introduction to the RUP indicator is detailed in the following two articles:
Today’s article will reference a more obvious example to help everyone understand the RUP indicator. Simply put, RUP measures the "current overall unrealized profit status of the market."
From the perspective of chip holders, the higher the price, the more unrealized profit there is, so this indicator is highly positively correlated with the price trend of $BTC in most cases. Whenever there is a "non-highly positive correlation" trend, it is a signal worth paying attention to.
In previous articles, I provided a detailed breakdown of historical cyclical tops from the perspective of RUP. Today, we will observe the RUP of "this cycle" from a more macro perspective. As shown in the image above: I have marked the market conditions after two major upward waves in this cycle, the first being when the price rose and broke through 70,000; the second being when it broke through 100,000.
You will find: The RUP at 70,000 was actually higher than at 100,000? Why did the price increase, but RUP did not keep up? The reasons are as follows:
The main profit group in the market is often low-cost chips.
Low-cost chips have huge profits and account for a large proportion of unrealized profits.
If these low-cost chips are cashed out, it will greatly affect RUP.
At this point, some readers should have fully understood: As shown in the figure, when the price broke through 70,000, a large amount of Realized Profit appeared, indicating that a significant number of low-cost chips had realized profits. This led to the situation where, when the price subsequently rose to a higher position, RUP did not rise in sync. Related reading resource: The significance of Realized Profit: "On-chain Data Academy (Three): Have the Bottom Accumulating Operators Taken Profits?"
You may ask: "Well, those low-cost chips took profits, what does that have to do with me?" I have detailed this question in the first paragraph of a previous article, and interested readers can refer to this piece: "On-chain Data Detailed Analysis: Perhaps You Need to Be Prepared to Escape the Top at Any Time"
II. Subsequent Market Scenario Interpretation & Planning
From the perspective of RUP, during market declines, I previously published an article: "Market Update: Is the Bull Gone?"
https://x.com/market_beggar/status/1877371227377119614
Some of the content mentioned at that time is updated as follows:
As the price began to show bottoming signals two days ago (I immediately published a reminder at that time): https://x.com/market_beggar/status/1878834206689882585
$BTC has experienced a nice "rebound" market.
"Rebound"? Yes, I will define the current rise as a "rebound," rather than a trend reversal signal. If you have read my previous articles, you should know that I am not optimistic about 2025. After the price first surged above 100,000, a RUP divergence signal appeared; the current market is within the orange box in the image, and attentive readers should notice:
In the current market, the RUP (blue line) is rising slower than the price (black line). Therefore, if the price rebounds to around 103k, it will create a new high for the wave, but RUP is unlikely to reach a new high, thus forming a similar second divergence as in 2017. What if the price continues to rise and sets a new historical high? Then it may create a top divergence structure similar to 2013 and 2021.
Regardless of which situation occurs, when the price turns and forms a wave reversal, I will update the RUP status here at the first opportunity.
III. Conclusion
Today, I explained the principle of RUP divergence again and outlined several possible future trends for $BTC, hoping to be of help to all readers!
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