What this chart shows
NUPL asks one question of the whole market: if every holder sold right now, what fraction of the market cap would be profit?
It is mathematically a rescaling of MVRV (NUPL = 1 − 1/MVRV), bounded above by 1, which makes the named zones comparable across cycles. This page computes it exactly that way — from Coin Metrics' published MVRV ratio (CapMVRVCur) — since the realized cap dollar figure itself isn't published on the free community tier.
How to read it
The zone names describe the psychological state consistent with the arithmetic. Above 0.75, three quarters of the market's value is paper profit — the euphoria band that contained the 2013, 2017 and (barely) 2021 tops. Below 0, the average coin is held at a loss — the capitulation band that contained every major bottom. The two middle bands are where Bitcoin spends most of its life and carry little signal on their own.
Limitations
Zone thresholds (0.25 / 0.5 / 0.75) are round numbers chosen for legibility, not derived from theory. The euphoria band has been reached at progressively lower heights each cycle — if that decay continues, a future top could form without ever entering it. Same lost-coin and off-chain-custody caveats as all realized-cap metrics.