Bitcoin NUPL Shows Average Holder Back In Profit, But For How Long?

Keshav Verma

1 year ago

3 mins read

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On-chain data shows the Bitcoin NUPL metric is back to a positive value, suggesting the market as a whole is back in profit.

Bitcoin NUPL Latest Trend Could Signal The Bottom Is Already In

As pointed out by an analyst in a CryptoQuant post, the BTC NUPL breaking above the neutral market may be a sign that the bottom has set in.

The “Net Unrealized Profit/Loss” (or “NUPL” in short) is an indicator that’s defined as the difference between the market and realized caps, divided by the market cap.

In simpler terms, what this metric tells us is the profit/loss ratio among investors in the current Bitcoin market.

The indicator works by looking at the on-chain history of each coin to see what price it was last moved at. If this selling price of any coin was less than the current BTC value, then that particular coin is holding some profit right now. Otherwise, it is in loss at the moment.

When the value of the NUPL is greater than zero, it means investors in the Bitcoin market as a whole are in profit. On the other hand, the indicator’s value being negative implies the overall market is currently in a state of loss.

Now, here is a chart that shows the trend in the BTC NUPL over the last several years:

The value of the metric seems to have surged up in recent days | Source: CryptoQuant

As you can see in the above graph, the quant has marked the relevant zones of bear market trend for the Bitcoin NUPL.

It looks like some time after plunging deep below zero, a bounce back to positive values has been a sign of bottom formation during the previous bear markets.

Currently, the indicator is back to a positive value after observing a surge recently. This means that the investors as a whole are slightly in profit right now.

If the past cycles are anything to go by, this trend could imply the bottom has already been in for this Bitcoin bear market.

However, as is apparent in the chart, a break to green NUPL values doesn’t necessarily mean the end of the bear. It has only indicated that the crypto has already faced the worst.

Past bear markets have lasted for much longer than the current one so it’s possible that if a similar pattern follows, the market may drop back into loss and move sideways for a while, before a proper bullish momentum builds up.

BTC Price

At the time of writing, Bitcoin’s price floats around $22.6k, up 10% in the past week.

BTC has slumped down during the last 24 hours | Source: BTCUSD on TradingView

Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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