On-chain data reveals a qualitative change in the encryption bull run: Institutional funds getting on board promote a long-cycle slow bull, and the NUPL indicator shows a historic triple wave structure.

CryptoQuant on-chain analyst Yonsei_dent's latest research indicates that the current crypto bull market structure has essential differences from historical cycles. The continuous inflow of institutional funds brought by Bitcoin Spot ETF is driving the market towards a more sustainable but slower rising long-term bull market. The key indicator, Net Unrealized PNL (NUPL), has for the first time shown a "triple wave" pattern, breaking the single peak of 2017 and the double peak pattern of 2021. While institutional-led crypto asset allocation has reduced market volatility, it also means that a hundredfold big pump may be difficult to replicate, and investors need to adjust their expectations for excess returns.

NUPL indicator has a historic anomaly On Wednesday, Yonsei_dent, an analyst from the on-chain analysis firm CryptoQuant, pointed out that the net unrealized PNL (NUPL) indicator has shown an unprecedented "triple wave" structure, marking a leap in the maturity of the encryption market. This indicator accurately reflects market sentiment cycles by calculating the total floating profit and loss of positions across the network—when the value is high, it indicates that a large number of investors hold significant unrealized profits, increasing the risk of selling pressure.

"Historical data shows that NUPL peaks have always been an accurate signal for identifying the top of a bull run. The 2017 cycle presented a single massive wave, while the 2021 cycle formed a double surge, and the current cycle is attempting to build a third peak, which is a phenomenon that overturns historical patterns." Yonsei_dent emphasized in the report.

Institutional capital reshapes market DNA Analysts attribute this structural change to the scaling of institutional capital entering the market, particularly the sustained buying pressure brought by the U.S. Bitcoin Spot ETF. Compared to historically retail-driven cycles, the demand for cryptocurrency asset allocation from institutional investors is more stable and less speculative. "Bitcoin Spot ETF has completely rewritten the rules of the game," Yonsei_dent explained, "they inject stabilizers and massive liquidity into the market." Bloomberg data shows that since its launch in January, Bitcoin ETF has accumulated a net inflow of over $27 billion, with daily fund fluctuations significantly lower than during the historically retail-dominated period.

Slow Bull Cost: Rise Convergence but Extended Cycle The new pattern led by institutions brings dual effects: on one hand, the market capacity expands and volatility decreases; on the other hand, the magnitude of each wave of increase continues to narrow. Data shows that the peak increases of the three main upward phases in this cycle (October 2023, February 2024, July 2024) were 63%, 58%, and 31% respectively, showing a gradually decreasing trend. "The era of short-term hundredfold big pumps may be coming to an end," the report warns, "data shows that we are entering a new paradigm - the duration of the bull run is extending and the foundation is more solid, but investors need to adjust their expectations for historically high excess returns."

On-chain data confirms institutional holdings accumulation The auxiliary evidence comes from the changes in Bitcoin inventory on exchanges. Glassnode monitoring shows that since the approval of the ETF, the reserve on exchanges has dropped by 12%, reaching a five-year low, confirming that institutional funds are consolidating through custody channels. At the same time, the number of "whale addresses" holding over a thousand Bitcoins has increased by 17%, reflecting a rise in the concentration of large holders.

Conclusion: The triple wave structure of the NUPL indicator and institutional holding data corroborate each other, signifying that the encryption market has officially entered a new era of "institutionalized slow bull". The Bitcoin Spot ETF serves as a historical turning point, driving tens of trillions of dollars in traditional capital to continuously allocate to encryption assets, fundamentally reshaping market fluctuation characteristics and cyclical patterns. Investors need to be clear: although a long-term bull market led by institutions reduces systemic risks, it also compresses the space for excess returns. The future market will place greater emphasis on dual verification of fundamentals and technical aspects; those speculative strategies that rely on high leverage to chase big pumps may face severe tests. Grasping the flow of institutional funds and the process of compliance will become the key to victory in the new cycle.