UnRealizedProfit

Tech spec

Brief Description: The total unrealized profits held by Long-Term Hodlers.

UnRealizedProfit represents the accumulated profits that investors would incur if all coins, which are currently valued at less than their purchase price, were sold at the current price. It is an on-chain metric that gives an overview of the theorical profits held across the LTH cohort.

Metric variants

• _lth: UnRealizedProfit restricted to Long-Term Holders (age ≥ 155 days).
• _sth: UnRealizedProfit restricted to Short-Term Holders (age < 155 days).

Interpretation UnRealizedProfit provides valuable insights into sentiment and potential investor behavior. A high UnRealizedProfit might indicate a euphoria context, as investors are holding high profits, potentially leading to increased selling pressure. Investors and analysts use this metric to gauge the sentiment of the market and predict possible support or resistance levels depending on the financial stress among Bitcoin holders.

Advanced Explanation UnRealizedProfit concentrates on the Bitcoin that is held at a profit.. This metric aggregates the difference between the current price and the price at the time each a UTXO was created, but only for UTXOs that have not yet been spend, are in a state of profit.

If P(c) is the purchase price of UTXO u and P(current) is the current price of Bitcoin, UnRealizedProfit can be calculated as follows:

UnRealizedProfit = Σ [P(current) - P(u)] for all UTXOs where P(current) > P(u) 

This sum runs over all UTXOs u that are being held at a profit at the time of calculation.