Profit and Loss metrics answer the question: if all units of a given currency were sold today, how much would investors stand to gain or lose?
By looking at the delta between the price when a UTXO was created vs. the current price of an asset, we can determine whether the specific coins in that UTXO are in a state of unrealized profit (price has increased) or loss (price has decreased). When looking at this across the entire network, we can see how much of the network is in profit, and how much is in loss.
NUPL (Net Unrealized Profit/Loss) specifically looks at the difference between Unrealized Profit and Unrealized Loss to determine whether the network as a whole is currently in a state of profit or loss.
Any value above zero indicates that the network is in a state of net profit, while values below zero indicate a state of net loss. In general, the further NUPL deviates from zero, the closer the market trends towards tops and bottoms. As such, NUPL can help investors identify when to take profit (blue) and when to re-enter (red).
Net Unrealized Profit/Loss is the difference between Relative Unrealized Profit and Relative Unrealized Loss. It can also be calculated by subtracting realized cap from market cap, and dividing the result by the market cap.
Tuur Demeester, Tamás Blummer, and Michiel Lescrauwaet - A Primer on Bitcoin Investor Sentiment and Changes in Saving Behavior
Rafael Schultze-Kraft - Dissecting Bitcoin's Unrealised On-Chain Profit/Loss