Bitcoin surges 18.66% in May, analyst sees more room to grow

Bitcoin's price surged by 18.66% in May, reaching a high of $111,970. Despite this significant rally, well-known crypto analyst Lark Davis believes that key profit indicators suggest the market still has room to grow.

Davis highlighted two important metrics: the Net Realised Profit/Loss (NPL) and the Net Unrealised Profit/Loss (NUPL). The NPL indicator tracks the average paper profit across Bitcoin holders, and when it is strongly positive, it often signals that many investors have realized profits, which can precede market corrections. However, Davis noted that the NPL is not currently at peak levels, indicating that widespread profit-taking has yet to occur.

The NUPL metric measures how much profit or loss investors hold on paper without having sold. A positive reading indicates collective profitability among holders, while a negative value points to unrealized losses. On May 5, the NUPL was at 52.78%, and when Bitcoin reached its peak price recently, the indicator rose to approximately 58.7%. These values, though elevated, have not yet reached extreme levels historically associated with market tops, supporting Davis’s view that the rally may still have room to grow before a potential correction.

Bitcoin started May at approximately $94,146 and reached a new high near $111,970 by May 22, marking an 18.66% increase within just three weeks. Although the market experienced a slight correction of about 3.9% on May 23, bullish momentum quickly resumed, pushing the price back up by over 1.5% the following day. As of now, Bitcoin’s price stands at around $108,789—roughly 2.8% below its all-time high. This steady price action reflects ongoing investor interest and a cautiously optimistic market sentiment.

While Davis provides an optimistic take, it is important for investors to maintain a balanced perspective. Cryptocurrency markets remain volatile and subject to rapid changes based on external factors such as regulatory developments, macroeconomic conditions, and broader market sentiment. Monitoring key technical indicators like the NPL and NUPL, alongside fundamental factors, can offer valuable insights for making informed investment decisions.