TLDR

- The RUPL series of articles will be divided into 2 parts, this is the 1st part

- RUPL can present the current market's unrealized profit status

- By observing RUPL, one can discover the market's top and bottom patterns

- This article will share a buy the dips model based on RUPL

I. What is RUPL?

RUPL, full name Relative Unrealized Profit & Loss, is a metric that can be broken down into two parts: RUP and RUL.

Taking the RUP calculation method as an example:

1. Compare the current price with the last transfer price of each $BTC, and classify chips where "current price > last transfer price" as profit chips.

2. Multiply the profit amount of each profit chip by its corresponding quantity to obtain Unrealized Profit.

3. Finally, standardize the data based on the market value at that time.

In other words, Unrealized Profit is the total unrealized profit in the current market; Ra standardization based on market value to value, to facilitate horizontal comparison of market profits in different periods. The RUL algorithm is the same as, will not be repeated further.

As shown in the first image, the green line is RUP, and the red line is RUL. It can be seen that: price is highly positively correlated with RpUhighly negwith with RUL. This is intuitive, as the price rises, profit chips and unrealized profits naturally increase.

However, if you observe the image further, you will find that RUL will be higher than RUP in some time periods (i.e., red line than the greenUline, as in the yellow box in the image), indicating that the market is generally in an unrealized loss state. Are these time periods of special significance? Please continue reading

II. RUPL's Buy the Dips Application

As mentioned above, there is: "greare greedy others", when most chips in the market are in a state, be to the market and collect chips.

As shown in the second image, after marking the time periods where RUL > RUP in the first image and drawing this chart, it can be clearly seen that when RUL > RUP, it is almost always at a cycle bottom.

This is not arbitrary, the logic is:

"When the an overall loss state, it means that holding a large-price chips have basically completed distribution; and trapped investors often do not want to cut to to prices,, these two emotions intertwine, significantly leading to a significant decrease in selling pressure, as long as there is a buying order, it may drive a trend reversal and start rising."

This logic is very similar to the previously shared LTH-RP buy the dips strategy. Interested readers can refer to this article: 《

Next, let's temporarily ignore RUL and observe, and the Rchart alone, p and find that RUP has a relatively close value range at historical bottoms:

For example, I added a horizontal line of 0.4 to the chart, and you can clearly see the area where RUP < 0.4. (Here, 0.4 is a model parameter that can be adjusted, and will be mentioned later)

Since we found that RUP has a clear bottom interval, we can overlay the condition RRUP < 0.4 with the previous condition RUP < RUL for secondary signal filtering, resulting resulting in the p img://beats.cn/file_v6/20250421/76317f37-c433-4000-ae02-dbc dbab40454c0.png?x-oss-process=image/quality,q_50/format,webp" alt="">

This is a common method in model design, aiming to achieve more through signal and make the model's output signals more valuable.

The above image shows the the combination of two conditions (RUP < 0.4) + (RUP < RUL), although the filtering effect is not very significant, but it can still be seen that be more rigorous than using RUP < R. If 0.4 is reduced (such as setting to .38), the),), the model will be more strict, the but be careful of overfitting during parameter optimization, as blindly fine-tuning the model based on historical data may cause the model to become in the future.Supplement: Overfitting is similar to what we when often say about drawing conclusions on experiences.

IV.. Conclusion>

This article is the first part of the RUPL series, mainly introducing the definition and calculation method of the RURuand sharing the buy the dips model logic based indicator p Next, I will introduce a practical application based on RUPL for escaping market tops and review historical cycle tops, ensuring it will be full of dry goods, please stay tupned p>

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