NUPL Z-Score

This indicator is derived from Market Value and Realized Value, which can be defined as:

Market Value: The current price of Bitcoin multiplied by the number of coins in circulation. This is like market cap in traditional markets i.e. share price multiplied by number of shares.

Realized Value: Rather than taking the current price of Bitcoin, Realized Value takes the price of each Bitcoin when it was last moved i.e. the last time it was sent from one wallet to another wallet. It then adds up all those individual prices and takes an average of them. It then multiplies that average price by the total number of coins in circulation.

By subtracting Realized Value from Market Value we calculate Unrealized Profit/Loss.

Unrealized Profit/Loss estimates the total paper profits/losses in Bitcoin held by investors. This is interesting to know but of greater value is identifying how this changes relatively over time.

To do this we can divide Unrealized Profit/Loss by Market Cap. This creates Net Unrealized Profit/Loss, sometimes referred to as NUPL, which is very useful to track investor sentiment over time for Bitcoin.

Relative Unrealised Profit/Loss is another name used for this analysis.