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), and to what extent.
Unrealized Profit represents the total profit accrued by UTXOs which were created (i.e. realized) when the price of the asset was lower than the current price.
Unrealized Profit is defined as the total profit (in USD) of all coins in existence whose price at realization time was lower than the current price, normalized by the market cap.
Rafael Schultze-Kraft - Dissecting Bitcoin's Unrealised On-Chain Profit/Loss