TL;DRNUPL = 1 − (1 / MVRV ratio). It expresses aggregate unrealized profit as a percentage of market cap rather than a raw dollar figure, and is often bucketed into named zones from capitulation (negative) to euphoria (above ~0.75). The zones describe where historical readings have tended to cluster; none of them acts as a threshold that triggers anything on its own.
The formula and where it comes from
NUPL is derived directly from the same two inputs behind MVRV and realized price: market cap and realized cap. Where MVRV expresses their relationship as a ratio, NUPL expresses it as a share of market cap:
NUPL = (Market Cap − Realized Cap) / Market Cap = 1 − (1 / MVRV)
A NUPL of 0.5 means half of the network's current market cap represents unrealized profit relative to where those coins last moved. A NUPL of 0 means market cap equals realized cap — the average holder is exactly breakeven. Negative NUPL means the average holder is underwater in aggregate.
The named zones
NUPL is commonly bucketed into named ranges: capitulation (below 0), hope/fear, optimism/belief, and euphoria/greed (roughly above 0.75). These labels describe where historical cycle extremes have clustered — euphoria-zone readings have coincided with the final stretch of past bull runs, and capitulation-zone readings have coincided with deep bear-market lows. They are descriptive buckets built after the fact from a handful of cycles; the exact cutoffs don't come from any deeper scientific basis.
Why "euphoria" doesn't mean "top is today"
NUPL readings have sat in the euphoria zone for months at a stretch during past bull markets — far longer than just the final day before a top. Treating zone entry as a timing signal has historically meant exiting a rally far too early. The zone tells you something real about the market's aggregate profit position — it just doesn't tell you how much longer that position can persist.
Which named zone NUPL falls into today — computed live from real market cap and realized cap data — is answered on the NUPL chart.
Questions people actually ask about this
NUPL gets compared to MVRV Z-Score a lot, since both come from the same two ingredients: market cap and realized cap. The difference is in the scaling. NUPL expresses the gap as a percentage of market cap, which keeps every reading in a bounded range that's easy to eyeball across different eras. MVRV Z-Score instead divides that same gap by the market cap's own historical volatility. The two usually move in the same direction, but they're not interchangeable, and a divergence between them isn't a glitch — it just means the two scaling choices are reacting differently to the same underlying numbers. Going negative is a real, recorded state for NUPL, not a theoretical edge case: it happened at the bottom of the 2015, 2018, and 2022 bear markets, whenever the average holder's cost basis actually exceeded the price bitcoin was trading at.
One thing that deliberately doesn't happen here: the zone boundaries don't get quietly redrawn once a cycle ends and the old numbers stop lining up. They're fixed and published in advance. That's a constraint, not a convenience — a boundary that can be adjusted after the fact to fit whatever just happened stops being able to tell you anything, since it can never actually turn out to be wrong.