The Unrealized Profit/Loss (NUPL) of Bitcoin ($BTC) has again become neutral. This indicates a likely shift in the market sentiment following a phase of notable weakness. However, despite this positive outlook, the market members are growingly concerned over a potential interest rate increase by the Fed. Additionally, the rising macroeconomic uncertainty could further influence the wider retail market sentiment.

Bitcoin NUPL Metric’s Return to Neutral Zone Indicates Market Transition

The on-chain data points out that Bitcoin’s NUPL is back in its neutral zone. At the moment, it accounts for 0.22 points, following the recent drop into loss zone. Formerly, the respective territory has often denoted transitional periods where markets turn from fear-led selling to accumulation. In this respect, $BTC’s price, which recently hit $70.6K, keeps fluctuating while investors evaluate whether the current neutral reading highlights stabilization or just a provisional halt ahead of renewed volatility.

Apart from that, the long-term cyclical behavior shows NUPL’s oscillation between euphoric peaks and capitulation phases. The present positioning signifies that the market is neither distressed nor overheated, displaying a relatively balanced risk environment. Additionally, while the investors in the retail market are cautious, the on-chain statistics are turning positive.

Hence, this signals enhancing structural support at the bottom of the market. Even then, the macro conditions are raising the pressure when it comes to the near-term outlook of the leading cryptocurrency. In the case of interest rate, 12.4% of the market participants are expecting a 25-basis-point increase at the FOMC meeting on the 29th of April.

Potential Fed Rate Hike Raises Concerns over Bearish Streak

Despite the neutral NUPL position, Bitcoin is facing the risk of another bearish streak in the case of a possible interest rate hike. While the market shows a relative stability, this could be a short-term shift before another volatile phase. Keeping this in view, the traders and market onlookers are keenly watching for the Fed signals and the on-chain metrics to determine the market outlook.