Revisiting RUP Evasion Signaling: Principle Analysis with Current Market Conditions and Subsequent Script Deduction

Original Title: "Revisiting RUP Divergence as a Top Signal: Principle Analysis in Light of Current Market Conditions & Subsequent Script Interpretation"

Original Author: Mr. Berg, On-chain Data Analyst

1. Principle of RUP Divergence as a Top Signal

Regarding the RUP indicator, detailed analyses can be found in the following two articles:

1. "On-chain Data Academy (IX): Market Barometer RUPL(I) Data Introduction & Buy-the-Dip Application"

2. "On-chain Data Academy (X): Market Barometer RUPL (II) Strongest Top Signal & Detailed Analysis of Historical Cycle Tops"

This article will provide another clear example to help everyone understand the RUP indicator. In simple terms, RUP measures the "current overall market unrealized profit status".

From the perspective of hodlers, the higher the price, the higher the unrealized gains, so this indicator is highly positively correlated with the price of $BTC in most cases. Once a trend of "non-highly positive correlation" emerges, it is a signal worth paying attention to.

In previous articles, I detailed the historical cyclical tops from the perspective of RUP. Today, we will take a more macroscopic view to observe the RUP of this current cycle. As shown in the above chart: I have marked the price movements after two major upswings in this cycle, the first when the price rose, breaking 70,000; and the second when it broke 100,000.

You will notice: The RUP at 70,000 is actually higher than at 100,000? Why did the RUP not keep up with the higher price? The reasons are as follows:

1. The market's main profit group is often the low-cost basis chips  

2. Low-Cost Chip Profit Surge: A significant portion of unrealized profits, if cashed out, would significantly impact RUP  

3. If these low-cost chips were cashed out, it would have a huge impact on RUP

At this point, some readers should already have a complete understanding: As shown in the chart, when the price broke through $70,000, a large amount of Realized Profit appeared, indicating that a large number of low-cost chips had completed profit-taking. This led to: as the price rose to higher levels subsequently, RUP did not rise in sync. Related reading resources: The Significance of Realized Profit: "On-chain Data School (III): Did the bottom-feeding market makers take profits?"

You may ask: "Well, if those low-cost chips took profits, what does that have to do with me?" I detailed this question in the first paragraph of a previous article. Interested readers can refer to this piece: "Detailed Analysis of On-chain Data: Perhaps you need to be prepared to exit at any time"

II. Future Market Scenario Interpretation & Planning

Looking at it from the perspective of RUP, when the market was falling, I once posted an article: "Market Update: Has the bull run ended?"

https://x.com/market_beggar/status/1877371227377119614  

Some of the content mentioned at that time is updated today:

With indications of a bottom appearing in the price two days ago (I immediately posted a reminder): https://x.com/market_beggar/status/1878834206689882585  

$BTC has seen a decent "rebound" market movement.

"Rebound"? Yes, I will define the current uptrend as a "rebound," rather than a signal of trend reversal. 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, there was a divergence signal in RUP once; the current market is within the orange box in the chart, and observant readers should notice:

In the current market situation, the RUP (blue line) is rising at a slower pace than the price (black line). Therefore, if the price bounces back to around 103k, the price will set a new short-term high, but RUP is unlikely to reach a new high, thus forming a secondary divergence similar to 2017. What if the price continues to rise and sets a new all-time high? Then we may see a top divergence structure similar to 2013 and 2021.

Regardless of which scenario unfolds, when the price eventually turns to form a short-term reversal, I will definitely update the RUP status here as soon as possible.

III. Conclusion

Today, we once again discussed the principle of RUP divergence, while also outlining several possible future trends for $BTC. I hope this has been helpful to all our readers!

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