On-chain data shows the Bitcoin NUPL metric has now declined to lows not seen since the COVID-19 crash back in 2020.

As explained by an analyst in a CryptoQuant post, the NUPL past trend may suggest that current values could be favorable for a rebound in the crypto’s price.

The “net unrealized profit and loss,” or NUPL in brief, is an indicator that’s defined as the difference between the current Bitcoin market cap and its realized cap, divided by the market cap.

The “realized cap” checks what price each coin on the chain was last moved at, and using these prices it calculates the crypto’s capitalization (while the normal market cap takes the sum of all coins’ value at the current price).

What this metric tells us is whether the BTC market participants as a whole are holding a profit or a loss at the moment.

When the value of the ratio is above zero, it means the overall market is in profit currently. On the other hand, values less than zero imply holders are carrying a loss right now.

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Naturally, the metric being exactly equal to zero suggests the investors as a whole are just breaking even currently.

Now, here is a chart that shows the trend in the Bitcoin NUPL metric over the last few years:

As you can see in the above graph, the quant has marked the different zones of the Bitcoin NUPL indicator with different colors.

It looks like the ratio has observed some decline recently, and its value has now plunged down into the “green” zone for the first time since the COVID-19 crash.

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In the history of the crypto, there have been multiple instances where shortly after the indicator has touched into this zone, the price has seen an upwards turn.

However, there is also the example of 2018, where the Bitcoin NUPL kept moving sideways in the green zone for a long while, until finally the value of the coin observed a sharp plummet, taking the market into loss.

It now remains to be seen whether this time the crypto will follow the pattern of a rebound, or if it will show a trend similar to that in 2018.

At the time of writing, Bitcoin’s price floats around $30.2k, down 1% in the past week.

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