Bitcoin (BTC) on-Chain Analysis: Net Unrealized Profit/Loss (NUPL) Becomes Negative for the First Time Since March 2020

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In Brief
  • NUPL has crossed into negative territory.

  • Historically, this has been a sign of bottoms.

  • Previous bottoms were reached at -0.56 and -0.36.

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Be[in]Crypto looks at on-chain indicators for Bitcoin (BTC), more specifically the Net Realized Profit/Loss (NUPL) indicator. This is done in order to determine if BTC has reached a bottom or if it is still in the middle of a prolonged bear market


NUPL is an on-chain indicator that shows whether the market is in a state of profit or loss. It is created by simply dividing relative unrealized profits with relative unrealized losses. 

Negative values suggest that the market is in a state of loss, while positive values suggest that it is in a state of profit. 

A state of loss means that if all coins bought at prices higher than the current market price were sold, the value would be higher than if all the coins that were bought at prices lower than the current market price.

Historically, market cycle tops have been reached above or close to 0.75 (blue), while bottoms have been reached below 0 (red).

Current breakdown

The BTC market cycle and NUPL have an interesting relationship in regards to the movements of the latter above and below the 0.5 line. After a sustained upward trend, crosses below 0.5 (black circles) suggest that a new, bearish market cycle has begun.

However, sometimes two crosses are required in order for the downward trend to begin. 

NUPL crossed below 0.5 for the second time in Jan. 2022 and has been falling sharply since.

NUPL Breakdown
NUPL Chart By Glassnode

Negative NUPL

In the two previous market cycles, once NUPL fell below 0.5, it bounced sharply (black circles). This was a result of a final relief rally prior to another decrease. 

That was not the case in the current breakdown (blue circle). Once the indicator decreased below 0.25, it continued its descent and fell to -0.06 on June 19. This is the same level that was reached in March 2020 (red circles). It also led to a new all-time low in the Net Realized Profit/Loss indicator.

When will BTC bottom?

The two previous market cycle bottoms (black circles) were reached at -0.56 and -0.36, respectively. Compared to them, the current reading still has a lot of room to fall. But, it is worth mentioning that the 2015 bottom reached 19 days after NUPL fell into negative territory. Similarly, the 2018 bottom was reached 24 days after such a decrease occurred. So, even if this were the case, an absolute bottom would be expected soon.

If this however is not an absolute but it is a local bottom, similar to that of March 2020, it is possible that BTC has already bottomed and will continue increasing towards new highs. 

In any case, it seems that at least a relief rally is likely.

For Be[in]Crypto’s latest bitcoin (BTC) analysis, click here


All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
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Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona graduate school of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst.

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