On-Chain Signals: SOPR, NUPL & MVRV
Three on-chain metrics — SOPR, NUPL, and MVRV — have consistently marked major cycle turning points in Bitcoin. They're not perfect timing tools, but as macro context indicators, they're among the most reliable signals available in any market.
SOPR — Are Holders Selling at a Profit or Loss?
The Spent Output Profit Ratio (SOPR) measures whether coins being spent (moved/sold) are moving at a profit or loss relative to when they were last moved. It's calculated as: value at spend time ÷ value at creation time.
- SOPR > 1.0: The average coin spent today was bought cheaper — holders are taking profit
- SOPR = 1.0: Coins moving at breakeven — key psychological level
- SOPR < 1.0: The average coin spent today was bought at a higher price — holders are selling at a loss (capitulation)
The power of SOPR is in its extremes. When SOPR reaches very low levels (0.96–0.97), it means the majority of the market is capitulating — selling at a loss. Historically, these periods end quickly and mark major bottoms. When SOPR reaches high levels (1.05+) for extended periods, widespread profit-taking signals distribution and potential tops.
NUPL — Net Unrealised Profit/Loss
NUPL measures the overall profitability of the market — what percentage of BTC's market cap is currently in profit vs. loss. It's calculated as: (Market Cap − Realised Cap) ÷ Market Cap.
It ranges from roughly −0.5 to +0.75 across cycles. The named zones correspond to market psychology:
When NUPL enters Capitulation (below −0.25), the entire market is underwater. Most holders are at a loss. This is historically the most painful — and most profitable — time to buy. When NUPL enters Euphoria (above 0.75), the vast majority of holders are sitting on large unrealised gains and are psychological primed to lock them in.
MVRV — Market Cap vs. Realised Cap
MVRV (Market Value to Realised Value) is the ratio of Bitcoin's market cap to its realised cap (what all BTC would be worth if valued at the price each coin last moved). It tells you: how overvalued or undervalued is the market relative to what everyone actually paid?
| MVRV Range | Market State | Interpretation | Historical Action |
|---|---|---|---|
| > 3.7 | Extreme overvaluation | Market cap 3.7× cost basis — very few buyers above current prices | Historically marks cycle tops (BTC 2017, 2021) |
| 2.4 – 3.7 | Overvalued | Significant unrealised profit — distribution risk rising | Reduce exposure, tighten stops |
| 1.0 – 2.4 | Fair value | Market trading near to moderately above aggregate cost basis | Hold / accumulate dips |
| 0.8 – 1.0 | Undervalued | Market near cost basis — most holders near breakeven | Accumulation zone |
| < 0.8 | Deep undervaluation | Market below aggregate cost basis — majority of market underwater | Historically marks cycle bottoms |
Combining the Three Signals
These three metrics work best when they align. A confluence of signals is far more powerful than any single indicator:
Bottom Confluence Signals
- SOPR below 0.97 (capitulation)
- NUPL below −0.20 (Capitulation zone)
- MVRV below 1.0 (below cost basis)
- Exchange reserves rising (panic selling)
- LTH supply at multi-year high (never selling)
Top Confluence Signals
- SOPR above 1.05 for 4+ weeks
- NUPL above 0.70 (Euphoria zone)
- MVRV above 3.5
- Exchange inflows spiking (supply returning)
- LTH supply declining (old hands distributing)
Key Takeaways
- SOPR below 1.0 = capitulation (most coins being spent at a loss) — historically marks major bottoms
- NUPL maps the full emotional cycle from Deep Capitulation (−0.5) to Euphoria (+0.75)
- MVRV above 3.7 has historically marked cycle tops; below 0.8 has marked cycle bottoms
- Signal confluence (all three aligning) is far more powerful than any single metric
- These are macro tools — they tell you where you are in the cycle, not exactly when to buy or sell
- All three metrics are available free on Glassnode — check them monthly for strategic context