😰Sentiment of Anxiety: What NUPL Reveals About Bitcoin

The Net Unrealized Profit/Loss (NUPL) is a metric that measures market sentiment towards Bitcoin by calculating the difference between Market Cap and Realized Cap, divided by Market Cap. This metric helps understand whether most investors are in profit or unrealized loss, providing a clear view of the current market sentiment.

Currently, the NUPL value stands at 0.457, indicating that the market is entering a phase of anxiety as it moves towards greed. Values in this range in the past have typically signaled periods of price consolidation or a potential trend change, either continuing a bullish market or starting a decline.

In 2024, the highest NUPL value reached was 0.64, compared to 0.75 in 2021 and 0.79 in 2017. We observe that Bitcoin has not followed the same pattern as previous cycles, creating anxiety among investors. A more detailed analysis with a trend line shows that, unlike other cycles, the value did not reach this line

in 2024, creating a gap. This reinforces the belief among many investors that there is still room for further gains in the market.

In 2017, the first formation of a gap occurred when Bitcoin was priced at $2,800 (June 2017), and shortly afterward, the price reached $20,000. In 2021, the gap continued, but by April, the NUPL had already reached the trend line, unlike in 2024. The big question remains whether the market will decline from now on or if we will have the momentum to repeat something similar to 2017.

This scenario depends on various factors, such as the increase in derivative market volume, volatility, and holder behavior. In 2017, we saw a classic V-shaped top, while in 2021, there were two tops characteristic of institutional distribution. This shows that the market has become more complex and that NUPL is an excellent tool for capturing the general sentiment, but it should be complemented by other variables for more accurate decision-making.