As Bitcoin's recent rise continues, analysts at cryptocurrency analysis firm CryptoQuant pointed out a critical metric: Net Unrealized Profit/Loss (NUPL).
This often overlooked indicator provides valuable insight into the psychology of Bitcoin whales and the overall health of the market, according to analysts.
NUPL measures the total profit or loss of Bitcoin investors by comparing the current market value of Bitcoin to the total purchase price of all Bitcoins. In other words, it evaluates whether investors are in profit or loss.
According to the analyst, NUPL goes beyond just price fluctuations. It examines the emotional state of Bitcoin whales, large wallets that significantly influence the market.
NUPL is broken down into:
- NUPL > 0: Yatırımcılar genel olarak kârda.
- NUPL = 0: Investors are at break-even; There is neither profit nor loss.
- NUPL < 0: Yatırımcılar genel olarak zararda.
During the 2021 bull run, NUPL data was a quiet harbinger, according to CryptoQuant. He had signaled the need to be cautious months before the summit. While most eyes were fixed on the price charts, NUPL was whispering about investor sentiment.
As of February 8, 2024, the NUPL value is 0.48. This means investors are still in the money overall, but have given up some gains from late-2023 peaks, analysts say. The market is delicately balanced and a turning point is approaching.
Historically, a bull market tends to be triggered when NUPL exceeds 0.5, according to analysts. CryptoQuant said tracking this metric could be beneficial for the BTC community.
*This is not investment advice.