On-chain data shows that Bitcoin holders have extended their underwater range in the short term, with BTC continuing to trade based on their costs.
Short-term Bitcoin holders are still experiencing net losses
In a new after at This indicator, as the name suggests, measures the net amount of profit or loss that BTC investors bear as a whole.
The measure represents net profit/loss in USD terms, but because the capital stored in the cryptocurrency is on an upward trajectory, the absolute value of gains and losses also increases. To normalize across cycles, the indicator compares net profit/loss to the asset’s market capitalization.
When the value of the NUPL is positive, it means that BTC investors as a whole are in a state of net unrealized gain relative to market capitalization. On the other hand, the value of the metric below zero indicates that the entire network is flooded. In the context of the current topic, the NUPL of a specific part of the blockchain is of interest: short-term holders (STHs). This cohort includes the BTC investors who purchased their coins in the last 155 days.
Here is the chart shared by Glassnode showing the trend in Bitcoin STH NUPL over the past few years:
Looks like the value of the metric has been negative in recent weeks | Source: Glassnode on X
As shown in the chart above, the Bitcoin STH NUPL has been negative lately, indicating that recent buyers of the asset have suffered a net unrealized loss.
The group first went underwater in November when the cryptocurrency’s price witnessed its crash. BTC stayed the course in December and saw some recovery in January, but even at the peak of the rise, STHs were unable to return to gains.
“A recovery above ~$98,000 appears to be the minimum threshold needed to return this cohort to a net profitable state,” the analytics firm explains. It now remains to be seen whether the STHs’ streak of unrealized losses will continue to expand in the near future or whether BTC will regain its cost base.
The NUPL provides information on the gains and losses that Bitcoin investors have yet to capture. Another measure, net realized gain/loss, covers the gains and losses that BTC holders “harvest” through their trades.
As the head of research at CryptoQuant, Julio Moreno, pointed out in an X afterBitcoin’s 30-day Net Realized Profit/Loss value has recently been negative, a sign that loss-taking outweighs profit-taking. This is the first time since October 2023 that loss realization has dominated this time frame, as the chart below shows.
How the BTC Net Realized Profit/Loss has changed in the last few years | Source: @jjcmoreno on X
BTC price
At the time of writing, Bitcoin is trading around $90,900, down more than 2% in the past week.
The trend in the price of the coin over the last five days | Source: BTCUSDT on TradingView
Featured image of Dall-E, chart from TradingView.com
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