Methodology
The
NUP Dominance Index (Net Unrealized Profit Dominance) measures the share of total unrealized profit-and-loss magnitude attributable to unrealized profit.
It is calculated as:
NUP Dominance = 100 × NUP / (NUP + NUL), where NUP is Relative Unrealized Profit (fraction of market cap) and NUL is Relative Unrealized Loss (fraction of market cap).
Interpretation:
- Top Risk (95): When the index climbs to 95 or higher, it indicates that almost the entire Bitcoin network is sitting in profit, signaling extreme greed and high profit-taking pressure. This has historically marked major cycle tops (e.g., 2013, 2017, 2021).
- Capitulation (40): When the index drops below 40, it indicates that the vast majority of holders are underwater, signaling capitulation and seller exhaustion. This has historically marked major cycle bottoms (e.g., 2015, 2018, 2022).