NUPL measures the share of Bitcoin's total market value currently held as unrealized profit versus unrealized loss, across every coin in circulation. It's read through four named zones — Capitulation, Hope/Optimism, Belief/Thrill, and Euphoria/Greed — each historically associated with a different stage of the market cycle.
What Is NUPL?
Net Unrealized Profit/Loss answers a specific question: right now, across every single coin in circulation, is the network sitting on paper gains or paper losses relative to what each coin was last worth when it moved? It's a single number that summarizes the collective financial state of every Bitcoin holder simultaneously.
This matters because unrealized profit and loss drive real behaviour. Holders sitting on large unrealized gains are more likely to sell into strength — that's where distribution and blow-off tops tend to originate. Holders underwater are more likely to capitulate and sell at a loss during periods of stress — which is exactly the dynamic that produces bear-market bottoms.
The Formula
NUPL is calculated as:
The numerator — Market Cap minus Realized Cap — is the network's total unrealized profit or loss in dollar terms (the same core building block used in MVRV Z-Score). Dividing that by market cap converts it into a ratio: what share of the network's current value is unrealized gain. A NUPL of 0.5 means the market, in aggregate, is sitting on unrealized profit equal to half of its current market cap. A negative NUPL means the network as a whole is underwater relative to cost basis.
The Four Named Zones
NUPL's readability comes from its named zones, which map the raw ratio to a psychological stage of the market:
| NUPL Range | Zone | Historical Interpretation |
|---|---|---|
| Below 0 | Capitulation | Network collectively near or below cost basis — rare, often near major bear-market lows |
| 0 – 0.5 | Hope / Optimism | Modest collective profit, no extreme signal in either direction |
| 0.5 – 0.75 | Belief / Thrill | Significant collective gains, often appears during stronger bull phases |
| Above 0.75 | Euphoria / Greed | Extreme collective profit, historically near overheated cycle conditions |
See today's live NUPL reading and current zone on our NUPL indicator page.
NUPL vs. MVRV Z-Score
NUPL and MVRV Z-Score are built from the exact same underlying inputs — market cap and realized cap — which is why they tend to move together. The difference is in how each one is scaled. MVRV Z-Score standardizes the gap against historical volatility, which makes it more useful for comparing extremes across very different points in Bitcoin's history. NUPL expresses the same gap as a simple percentage of market cap, which makes it more intuitive to read at a glance and gives it the clean, named zones that make it easy to communicate.
In practice, they rarely disagree about the broad picture — if one is flashing euphoria, the other usually is too. Using both is less about getting a second opinion and more about having both a precise (Z-Score) and an intuitive (NUPL) way to describe the same underlying market condition.
Limitations
It inherits realized cap's blind spots. Because NUPL is built on realized cap, it shares the same limitation as MVRV: permanently lost coins are still counted at whatever price they last moved, which slightly distorts the aggregate picture — though gradually, not suddenly.
It's an average, not a distribution. A single NUPL reading tells you the network's aggregate profit/loss state, not how it's distributed between recent buyers and long-term holders. Two very different holder compositions can produce the same NUPL reading.
Zone boundaries aren't laws of physics. Like any historically-calibrated indicator, the exact thresholds that marked past cycle extremes are a useful reference, not a guarantee of where future extremes will land.
How to Use It
NUPL is best used as a slow-moving background gauge of market psychology rather than a short-term trading signal — it reflects profit and loss built up over months, so it doesn't whipsaw around daily price moves. A sustained move into Euphoria has historically been a reasonable cue to tighten risk management and slow new allocation; a sustained move into Capitulation has historically marked some of the more attractive long-term entry points available.
It pairs naturally with MVRV for a second read on the same underlying dynamic, and with SOPR Z-Score, which shows whether holders are actually acting on that unrealized profit right now rather than just sitting on it. It's also one of the 21 inputs to our Cycle Compass composite score.
For a broader tour of the other major indicators worth knowing, see our guide to 10 On-Chain Bitcoin Indicators Every Investor Should Know.