NUPL Explained: Net Unrealized Profit/Loss as a Cycle Sentiment Map

NUPL, Net Unrealized Profit/Loss, is closely related to MVRV but expresses the same underlying data as a percentage of market cap, which makes it intuitive as a sentiment band. It's one of the cleaner on-chain ways to ask: how euphoric or how capitulated is the market right now?

The definition

NUPL = (market cap − realized cap) / market cap

Same numerator as the MVRV calculation (market value minus aggregate cost basis), but expressed as a fraction of market cap instead of a ratio. The result is a number between roughly -0.5 and +0.85 historically.

Conceptually: what fraction of total market cap is unrealized profit (positive NUPL) or unrealized loss (negative NUPL)?

If NUPL = 0.6: 60% of the current market cap is unrealized profit sitting in holders' accounts. Holders are deeply in the green.

If NUPL = -0.2: 20% of current market cap is unrealized loss. The average holder is underwater.

The five sentiment zones

The standard NUPL framework divides the range into five named zones, each mapped to a typical cycle phase:

NUPL range	Sentiment label	Cycle phase
Below 0	Capitulation	Bear-market lows; broad pain
0 - 0.25	Hope / Fear	Recovery / accumulation
0.25 - 0.5	Optimism / Anxiety	Mid-cycle
0.5 - 0.75	Belief / Denial	Bull market acceleration
Above 0.75	Euphoria / Greed	Cycle top territory

These ranges are derived from Bitcoin's history. Each prior cycle top has come within or past the Euphoria zone; each prior cycle bottom has come in or near Capitulation. The zones aren't guarantees, they're historically reliable bands.

The most actionable insight: when NUPL crosses into Euphoria (>0.75), historically it has marked late-cycle territory worth defending profits in. When NUPL drops into Capitulation (below 0), historically it has marked accumulation zones with multi-year upside.

NUPL vs MVRV, when to use which

NUPL and MVRV measure the same thing in slightly different units. Use the one that fits your question:

• MVRV when you want to ask "by what multiple is the price above the cost basis?"
• NUPL when you want to ask "what fraction of the market is unrealized profit?"

In practice, they move together and tell the same story. Most analysts cite both. If you only check one, NUPL is slightly more intuitive because the sentiment zones come pre-mapped.

NUPL by holder cohort

Like MVRV, NUPL is more useful when split by holder behavior:

LTH NUPL (long-term holders, dormant 155+ days). The patient hands' unrealized profit. When LTH NUPL is in Euphoria, the committed holders have huge unrealized gains and historically have distributed into them. When LTH NUPL drops into Capitulation, even the patient holders are losing, almost always coincides with cycle bottoms.

STH NUPL (short-term holders, moved within 155 days). Recent buyers' unrealized profit. STH NUPL going negative means recent participants are underwater, the recent rally or accumulation is failing. STH NUPL going strongly positive means recent buyers are sitting on gains, often the demographic that takes profit quickly on a pullback.

Cohort divergence is informative: LTH still in Belief while STH already in Euphoria suggests a rotation phase where short-term participants are being distributed into. LTH in Capitulation while STH in Hope suggests the bottom is forming with patient money returning.

How to use NUPL in trading

1. Cycle positioning. NUPL gives you a quick read on cycle phase. If you're entering a directional position, knowing whether the broader regime is in Optimism vs Euphoria heavily affects your conviction and sizing.

2. Sentiment confirmation. A price rally with NUPL still in the Hope zone has more room than the same rally with NUPL already in Belief. The metric tells you how much sentiment runway is left.

3. Top/bottom identification. Visits to Euphoria (>0.75) have historically been within months of cycle tops. Visits to Capitulation (below 0) have been within months of cycle bottoms. Neither is precise timing, but both are major positioning signals.

4. Divergence flags. Price making new highs but NUPL not matching prior highs = the rally is happening with less underlying euphoria (which is sometimes bullish, there's room to run, and sometimes bearish, the rally lacks real participation). Investigate which.

A common mistake: trading the zone label

A trader sees NUPL crosses into Euphoria and immediately shorts "because Euphoria = top." NUPL has stayed in Euphoria for many months in past cycles before the actual top. Shorting on entry to a sentiment zone is consistently early.

The discipline: zones are contextual, not triggers. NUPL in Euphoria says "we're in late-cycle territory; defensive positioning, partial profits, tighter stops are appropriate." It does not say "short now." For actual entries, combine the zone read with structural TA (failed HH, distribution patterns, declining flows) for confirmation.

A common mistake: assuming the zones repeat exactly

The zones were derived from Bitcoin's first three full cycles. Each cycle has been somewhat different, the last cycle's top came at a slightly lower NUPL than the prior cycle's, and the last bottom didn't reach as deeply into Capitulation as previous bottoms.

Each cycle has institutional, regulatory, and macro contexts that prior cycles didn't. The zones are useful guides, not exact templates. A NUPL of 0.65 might be the top in one cycle and mid-cycle in another. Combine with other metrics rather than treating any single zone read as definitive.

A common mistake: using NUPL on assets with too little history

ETH has reasonable NUPL history. SOL, AVAX, and most alts have 1-2 cycles of data, not enough to define reliable historical zones. Applying Bitcoin's NUPL zones to a new altcoin produces false signals because the underlying holder dynamics are different.

For Bitcoin: trust the zones with appropriate skepticism. For ETH: trust them with more skepticism. For everything else: use the direction of NUPL changes, not the absolute zone values.

Mental model, NUPL as the temperature gauge of holder psychology

Picture every Bitcoin holder having a personal "temperature": deep red when underwater, neutral at break-even, bright green at massive profit. NUPL is the population's average temperature plotted over time.

When the average temperature spikes to bright green (Euphoria), holders are in a state where any pullback feels devastating (because they have a lot to lose) and the marginal new buyer is being asked to pay rich prices. That's the setup for tops.

When the average temperature is deep red (Capitulation), holders have already lost most of what they could lose, the marginal seller is exhausted, and any new demand has nothing pulling against it. That's the setup for bottoms.

NUPL doesn't tell you the temperature will change tomorrow. It tells you the temperature is currently extreme, which has historically been when meaningful changes happen.

Why this matters for trading

NUPL is a mood read for the entire market in a single number. Glassnode publishes BTC and ETH NUPL on the free tier, with cohort splits available. Check it weekly alongside MVRV and exchange flows. Together, those three give you a robust positioning context that informs every TA-based trade. The discipline of checking, not necessarily acting on every shift, but being aware of where the metric sits, is what builds cycle-aware trading judgment.

Takeaway

NUPL expresses aggregate unrealized PnL as a fraction of market cap, mapped to five named sentiment zones (Capitulation, Hope, Optimism, Belief, Euphoria). Visits to extreme zones, Euphoria above and Capitulation below, coincide historically with cycle tops and bottoms. Use cohort splits (LTH, STH) for richer reads; treat the zones as positioning context rather than short-term triggers. Combined with MVRV and exchange flows, NUPL completes the basic on-chain regime picture.