Bitcoin (btc) is recovering from a “black swan” event that last rivaled the COVID-19 crisis of March 2020, data suggests.
In one of his quick take Posting on September 7, on-chain analytics platform CryptoQuant revealed a significant increase in loss-making unspent transaction (UTXO) results.
CryptoQuant: Bitcoin UTXO in "mirror" loss March 2020
Bitcoin can be worrying market participants With BTC price currently weak, but on-chain data paints an intriguing picture of “under the hood” activity.
UTXOs represent BTC left over after an on-chain transaction is executed. CryptoQuant's UTXOs in Loss metric tracks when a large number of these UTXOs are worth more than they were when the BTC was originally purchased.
More of these are currently at a loss compared to their original acquisition price than at any time since March 2020.
At that time, BTC/USD fell 60% to its lowest levels since March 2019, lows never seen again.
Considering the current losing UTXO data, CryptoQuant contributor Woominkyu ventured that, just like in March 2020, Bitcoin may be seeing, or already recovering from, a curveball selling event.
Summarized:
"Given that the current level of the 'UTXO in loss' indicator reflects that of the Black Swan event between March and April 2020 (due to Coronavirus), those anticipating another Black Swan event might consider whether we are already in the middle of the event they are waiting for." ”.
In percentage terms, 38% of UTXOs were loss-making at the end of August, a figure last seen in April 2020.
“When many UTXOs have losses, investors might be more inclined to sell, hinting at market anxiety. On the contrary, when the majority of UTXOs are profitable, it suggests an optimistic outlook and stronger holding sentiment among investors,” Woominkyu added.
Underwater Bitcoin Speculators Grow
Meanwhile, Bitcoin remains locked in a tight range amid the lack of an overall BTC price trend.
Related: Bitcoin Speculators Now Own the Least Amount of BTC Since All-Time Highs of $69,000
With no breakdown or breakdown ready to be completed, the cost basis data also shows the current spot price trapped between the acquisition prices of various investor cohorts.
This “Realized Price” (the price at which the bid last moved, divided by age group) shows that short-term holders fall into aggregate losses when BTC/USD is below around $27,000.
However, a full capitulation event has yet to be recorded on-chain.
This article does not contain investment advice or recommendations. Every investment and trading move involves risks, and readers should conduct their own research when making a decision.
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