What is NUPL?

NUPL (Net Unrealized Profit/Loss) shows at a single glance how much profit or loss all Bitcoin investors in the market are currently holding. It is the proportional representation of the difference between the total Market Capitalization and the investors’ average purchase cost (Realized Capitalization).

This chart is one of the most reliable compasses used to identify which psychological phase the market is in (fear, denial, hope, euphoria) and to accurately pinpoint the macro cycle tops and bottoms.

How to Interpret It? (Critical Top and Bottom Levels)

🔴 Above 0.7 (Extreme Euphoria / Top Signal): A NUPL value exceeding 0.7 indicates that the overwhelming majority of investors in the market have reached massive unrealized profits. This “Greed and Euphoria” phase, where everyone is in profit, is highly dangerous. Historically, these levels mark macro tops (the beginning of a bear market) where investors collectively start taking profits. It is a harbinger of severe price corrections and long-term declines.

🟢 Below 0 and -0.2 (Capitulation / Historic Bottom Signal): The value dropping below zero (into the negative zone) shows that the majority of the market is at a loss. Levels at -0.2 and below (the Fear and Capitulation phase) are moments when hope runs out and retail investors panic sell at a loss. However, for smart money (whales), these “bloody” periods represent historic buying (accumulation) opportunities where risk is at its lowest and Bitcoin can be gathered well below its true intrinsic value.

What Does the Trend Direction Tell Us?

• Rising Trend: The number of investors moving into profit is increasing in the market. As the price rises, investors’ appetite to sell and take profits (realization) will also increase, which strengthens resistance levels.

• Falling Trend: The market is cooling down and profits are melting away. As the metric approaches zero, investors who refuse to sell at a loss restrict the available supply, allowing the market to slowly find its natural bottom.