What Are Realised Profit and Realised Loss?

Realised Profit and Realised Loss measure the USD value of gains or losses that were actually locked in on-chain when coins moved. They are not paper gains. They record what holders accepted at the moment of spending.

How Are They Calculated?

  • For each spent output, compare its value when created with its value when spent.
  • If the spend value is higher, the difference contributes to Realised Profit.
  • If the spend value is lower, the difference contributes to Realised Loss.
  • Aggregate across all spends for the chosen period.

Because they capture finalised outcomes, these series tell you how the market is behaving at turning points.

Why These Metrics Matter

  • They identify whether rallies are being distributed into or absorbed.
  • They reveal capitulation when losses are locked in aggressively.
  • They help separate healthy pullbacks from trend damage by showing how participants choose to exit or hold.

Reading the Attached Charts

1) Profit/Loss Balance at a Glance

Bitcoin Realised Profit Loss Ratio (1m window): Source BGeometrics

This panel tracks the ratio of realised profit to realised loss. Peaks point to profit-taking dominance, troughs point to loss realisation dominance around pullbacks.

How to read it:

  • Ratios above 1 show profit-taking outweighing loss-taking. In established advances this can be fine if price digests the flow.
  • Repeated spikes in the ratio while price stalls often signal distribution.
  • Moves below 1 during drawdowns reflect capitulation. A swift recovery back above 1 suggests losses were absorbed.

2) Who Is Doing The Realising? LTH vs STH

Bitcoin Realised Profit/Loss by Cohort, LTH vs STH (1m window): Source BGeometrics

This panel splits realised outcomes between short-term holders and long-term holders.

How to read it:

  • Rising STH Profit with modest LTH Profit is typical of trend health. Recent buyers realise gains while older hands remain steady.
  • A jump in LTH Profit while price fails to push on is a distribution warning from older supply.
  • An uptick in STH Loss during pullbacks is expected; if losses remain elevated yet price stabilises, absorption is occurring.
  • Persistent LTH Loss is rare and usually marks late-bear capitulation phases.

3) Net Realised Profit/Loss (NRPL)

Bitcoin Net Realised Profit/Loss, BTC terms (1m window): Source BGeometrics

This chart nets profit and loss to show whether the period closed in surplus or deficit.

How to read it:

  • Positive NRPL during price strength is normal. Watch the persistence of large surpluses without price progress for distribution risk.
  • Negative NRPL during drops can mark capitulation. A quick return to neutral or surplus while price stabilises is constructive.
  • Divergences between NRPL and price help flag stress. Price down with shrinking losses can precede relief.

What Capitulation and Euphoria Look Like

  • Capitulation: loss prints rise quickly, NRPL turns negative, the Profit/Loss Ratio dips below 1 and remains there for several sessions. STH Loss leads, sometimes followed by brief LTH Loss near extremes.
  • Euphoria: profit prints dominate, the ratio holds far above 1, NRPL shows large sustained surpluses. If LTH Profit accelerates while price stalls, risk of distribution rises.

Practical Use With Confluence

  • Pair with aSOPR to test whether profits are absorbed around the 1.0 line.
  • Add Realised Price bands to see if pullbacks are revisiting cohort cost basis.
  • Check Dormancy or CDD to verify whether old coins are driving the move.
  • Use URPD to identify cost-basis clusters likely to react when revisited.

Common Pitfalls

  • Treating one spike as a signal. Persistence and context matter.
  • Ignoring cohort split. LTH moves carry different weight to STH churn.
  • Reading in isolation from liquidity venues. Exchange netflows help validate whether realised outcomes are feeding supply.

A Simple Workflow You Can Reuse

  1. Start with Realised Profit/Loss Ratio. Is the balance favouring profits or losses, and is it persistent.
  2. Open LTH vs STH to identify the cohort behind it.
  3. Check NRPL for surplus or deficit and look for divergences versus price.
  4. Cross-check with aSOPR and Realised Price bands to judge absorption.
  5. Decide: distribution risk, absorption with continuation, or capitulation turning point.

FAQ

Can high realised profit be bullish.
Yes. If price continues to make progress while realised profit stays elevated, the market is absorbing supply.

Does negative NRPL mean a bottom.
Not automatically. It marks stress. Look for swift improvement and confluence elsewhere.

Why use cohort splits.
Because LTH behaviour signals rotation of older supply, while STH behaviour reflects recent buyers’ pressure.

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