As Bitcoin’s recent rise continues, analysts at cryptocurrency analytics firm CryptoQuant have highlighted one critical metric: net unrealized profits/losses (NUPL).
According to analysts, this often overlooked indicator provides valuable insights into the psychology of Bitcoin whales and the overall health of the market.
NUPL measures Bitcoin investors’ total profit or loss by comparing the current market value of Bitcoin to the total purchase price of all Bitcoin. In other words, it evaluates whether investors are making a profit or a loss.
According to the analyst, NUPL is about more than just price fluctuations. Examine the emotional state of Bitcoin whales, large wallets that significantly influence the market.
NUPL is divided into:
- NUPL > 0: Yatırımcılar genel olarak kârda.
- NUPL = 0: investors are at breakeven; There are no profits or losses.
- NUPL < 0: Yatırımcılar genel olarak zararda.
According to CryptoQuant, during the 2021 bull run, the NUPL data was a silent omen. He had signaled the need for caution months before the summit. While most eyes were fixated on price charts, NUPL was whispering about investor sentiment.
As of February 8, 2024 the NUPL value is 0.48. That means investors are still in the money overall, but have given up some gains from late-2023 peaks, analysts say. The market is in delicate balance and a turning point is approaching.
Historically, according to analysts, a bull market tends to be triggered when the NUPL rises above 0.5. CryptoQuant stated that tracking this parameter could be beneficial to the BTC community.
*This is not investment advice.
