AVIV_NUPL

Tech spec

Brief Description: Net Unrealized Profit/Loss adjusted for active Bitcoin supply.

AVIV_NUPL evaluates the profit or loss of the economically active Bitcoin supply, offering a refined version of the traditional NUPL metric. Active supply is defined by the cointime economics framework. AVIV_NUPL offers insights into the profit or loss status of the economically active Bitcoin supply.

Interpretation Positive values suggest that the active Bitcoin supply is predominantly in profit, while negative values indicate a prevalence of losses. This metric is especially useful for understanding the real-time sentiment of active market participants, offering a more accurate reflection of the current market dynamics by discounting inactive or lost coins. It helps to identify trends and potential market turning points by analyzing the profit or loss state of active Bitcoin holders.

Advanced Explanation AVIV_NUPL is calculated by taking the difference between the spot valuation of the Active Supply (Active Cap) and the Investor Cost Basis (Investor Cap), then normalizing this value by the Active Cap. It acts as an oscillator, indicating the extent of profit (positive values) or loss (negative values) within the actively traded portion of the Bitcoin supply. Unlike the traditional NUPL, AVIV_NUPL adjusts for lost and long-dormant coins, providing a more responsive and self-correcting measure that avoids the long-term upward drift seen in the original NUPL metric during cycle lows.

AVIV_NUPL = (Active Cap - Investor Cap) / Active Cap

Cointime Economics is a new framework for Bitcoin onchain analysis published by James Check and David Puell. References: https://ark-invest.com/white-papers/cointime-economics/ and https://insights.glassnode.com/introducing-cointime-economics/