Ethereum’s recent rally to $3,600 may not have come as a surprise to those tracking one powerful on-chain indicator. According to blockchain analytics firm Glassnode, the Net Unrealized Profit/Loss (NUPL) metric accurately signaled the bottom for Ethereum’s price before the surge began.
In a recent post on X (formerly Twitter), Glassnode shared insights from a report it created in collaboration with crypto exchange Coinbase. The report highlighted the behavior of the Ethereum NUPL metric, which fell into the “capitulation” zone earlier this year—just before the market turned bullish.
So, what exactly is NUPL and why is it important?
Understanding Ethereum’s NUPL Metric
NUPL stands for Net Unrealized Profit/Loss. It’s a metric used to measure the difference between the unrealized profits and losses across all Ethereum investors. To calculate this, Glassnode analyzes when each coin on the Ethereum network last moved. If the price at the time of its last transaction is lower than the current price, it’s considered to be in profit. If the last moved price is higher than the current value, it’s considered in loss.
The NUPL metric gives a sense of the overall market sentiment. When it’s positive, investors are mostly in profit. When it’s negative, they’re mostly in loss. These shifts can be important because, in crypto, the market often moves against the crowd’s expectations. For example, when many investors are underwater and panic-selling, it can create a bottom—after which prices start rising again.
Ethereum’s Capitulation Phase and Price Rebound
Earlier this year, Ethereum’s price dropped significantly, dragging the NUPL into negative territory—down to around -0.2. According to Glassnode’s sentiment categories, this level is called “capitulation,” which signals that most investors are experiencing unrealized losses and may be losing confidence.
However, in crypto, capitulation phases are often followed by trend reversals. That’s exactly what happened in Ethereum’s case. The NUPL reading indicated a build-up of extreme pessimism, which quietly laid the groundwork for a price rebound.
Since hitting that low point, Ethereum’s price has surged over 20% in just the past week, outperforming even Bitcoin. The ETH/USD pair reached around $3,600, reflecting growing confidence among both retail and institutional investors.
What’s Next for Ethereum?
Glassnode cautions that while the NUPL’s move out of the capitulation zone is a good sign for recovery, investors should still keep a close watch on the metric. When the market shifts too heavily into unrealized profits—meaning most investors are sitting on gains—the sentiment may switch to greed or euphoria. Historically, such phases have often been followed by price corrections.
In other words, while NUPL successfully predicted the bottom this time, it may also help signal when a local top is forming.
ETH Breaks Away from Bitcoin
What’s especially notable is that Ethereum has recently started to decouple from Bitcoin’s price trend. While Bitcoin has remained relatively steady, Ethereum has been gaining momentum. This breakout may be linked to several factors, including growing institutional interest, optimism around the Ethereum ETF, and broader investor appetite for smart contract platforms.
Additionally, Ethereum’s strong performance has come as the crypto market regains strength following months of sideways movement and regulatory uncertainty.
Final Thoughts
The Ethereum NUPL indicator has once again proven to be a useful tool for understanding market cycles. By measuring how much unrealized profit or loss exists among holders, it provides insights into overall investor sentiment—and potential turning points.
When the market was deep in fear and investors were largely in loss, the indicator hit the “capitulation” zone. That moment, in hindsight, marked the bottom before the current rally. Now that the NUPL has started to trend higher, investors may want to stay alert for signs of excessive profit-taking, which could trigger another shift in momentum.
Ethereum currently trades around $3,600 and remains in focus as traders watch for the next big move. Whether the rally continues or slows down, one thing is clear: on-chain analytics like NUPL are becoming key tools for predicting the next phase in the crypto market.
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