Bitcoin On-Chain Indicators for Market Sentiment and Supply
Summary
The document explains six Bitcoin indicators used to interpret investor sentiment and supply behavior: realized price, net unrealized profit/loss (NUPL), coins held or presumed lost, monthly long-term-holder position change, liquid versus illiquid supply, and the share of supply in profit. It describes how realized price approximates network cost basis, how NUPL reflects aggregate unrealized gains or losses, and how holder and liquidity measures may indicate accumulation, distribution, or potential selling pressure.
It gives illustrative chart observations: NUPL moved from near zero in early 2023 to about 0.3 by July, then stayed near 0.6 in early 2024; liquid and illiquid supply both grew through mid-2024. These are descriptive interpretations, not evidence that the indicators forecast returns. The article presents the measures as complementary context for market-cycle analysis and risk assessment, but offers no formal signal rules, backtest, or validation. Lost coins, address classifications, and inferred holder behavior also limit how literally these metrics can be interpreted.
Key ideas
- Realized price uses realized capitalization relative to supply as an estimate of the network’s aggregate cost basis.
- NUPL expresses unrealized gains or losses relative to market value and is presented as a sentiment gauge.
- Long-term holding and monthly position changes are used to distinguish accumulation from distribution.
- Liquid and illiquid supply classifications offer clues about tradable supply and possible selling pressure.
- The indicators provide market context, but the document does not establish predictive performance.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.