Key Takeaways
- Analyst Charles Edwards suggests Bitcoin's LTH-NUPL has entered a "historic and rare deep value zone."
- NUPL has been in the red "capitulation zone" since June 2022, a level previously associated with macro bottoms in bear markets.
- The Net Unrealized Profit/Loss (NUPL) metric indicates potential price floor formation based on historical patterns.
Understanding NUPL
The Net Unrealized Profit/Loss (NUPL) is a pivotal on-chain metric that measures the difference between relative unrealized profit and loss. Calculated by subtracting realized cap from market cap and dividing the result by market cap, it reflects investor sentiment:
- Relative Unrealized Profit: Tracks aggregate paper gains for coins purchased below current prices.
→ Current levels mirror 2011-2012 lows (blue zone) but remain above 2015/2020 extremes (red line). Historically, values between these zones (green area) preceded macro price bottoms. - Relative Unrealized Loss: Measures paper losses for coins bought above current prices.
→ Peaks (blue) aligned with past bear market lows (2011, 2015, 2018). The current trajectory suggests BTC may have bottomed if the logarithmic curve holds.
NUPL’s Bear Market Signals
A 7-day moving average (7MA) of NUPL reveals critical trends:
- Rising Support Line: Connects 2015/2018 lows to present values (blue arrow). BTC’s November 2022 low of $15,476 could mark this cycle’s bottom.
- Divergence Watch: Declining NUPL + rising Daily RSI (red arrow) may signal trend reversal. Analysts project a brief dip to $11K–$13K before sustained recovery.
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Edwards’ Deep Value Thesis
Charles Edwards highlights the Long-Term Holder NUPL (LTH-NUPL) variant—specific to investors holding BTC ≥155 days. Current LTH-NUPL levels (pink line) match historic bottoms, occurring just four times since Bitcoin’s inception.
"We are in a historic, rare deep value zone." — @caprioleio
FAQs
Q: How reliable is NUPL for spotting Bitcoin bottoms?
A: NUPL has accurately identified macro lows in past cycles, though confirmation via other metrics (RSI, volume) strengthens predictions.
Q: What’s the difference between NUPL and LTH-NUPL?
A: LTH-NUPL filters for long-term investors, whose capitulation often coincides with final bear market exhaustion.
Q: Could BTC drop below $15K again?
A: While possible, NUPL’s current alignment with historical support zones reduces probability of deeper declines.
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Conclusion
NUPL’s plunge into deep value territory—coupled with LTH surrender—echoes past market recoveries. While short-term volatility persists, the metric’s track record suggests BTC is primed for a long-term upside.