The natural logarithm makes the scale symmetric. A reading of +0.3 represents roughly the same proportional distance above realized price as −0.3 represents below it. The oscillator moves around zero, where zero means spot price is equal to the network's estimated average cost basis.
Below 0 — Deep Value — Price is below realized price, meaning the market is trading below the network's estimated average cost basis. Holders are collectively under pressure, and this condition has historically been rare. It has often appeared near major bear-market accumulation zones, but it does not guarantee a bottom.
0–0.6 — Fair Value — Price is above realized price by up to roughly 82%. Holders are in moderate collective profit, but there is no clear extreme signal in either direction. Long-term investors often use this range for steady DCA without urgency.
0.6–1.0 — Elevated — Price is roughly 82% to 172% above realized price. Significant unrealized gains are building across the network, and this has often appeared during stronger bull-market phases. Long-term investors often become more cautious with aggressive new buying and may begin reviewing risk.
Above 1.0 — High Risk — Price is more than roughly 172% above realized price, suggesting market conditions may be increasingly stretched. Historically, this zone has often aligned with overheated cycle conditions. Price can continue higher, but long-term investors often become more cautious with large new allocations and may use this area to review risk or gradually reduce exposure.
The oscillator is closely related to NUPL because both are derived from the relationship between price and realized price. The key difference is the logarithmic scale: NUPL compresses high positive extremes as it approaches 1, while the oscillator has no fixed upper bound. This can make the oscillator more sensitive during euphoric phases.
Use it alongside NUPL and the MVRV Z-Score for a broader view of Bitcoin's profitability and valuation cycle.
The information on this page is for educational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always do your own research before making any investment decision.