New research reveals Bitcoin UTXOs echoing March 2020 ‘black swan’ crash.

Bitcoin (BTC) is experiencing a recovery from a significant event that is comparable to the COVID-19 crash in March 2020, according to data provided by CryptoQuant, an on-chain analytics platform. CryptoQuant has observed a notable increase in loss-making unspent transaction outputs (UTXOs). UTXOs represent the Bitcoin left over after an on-chain transaction has taken place. CryptoQuant’s UTXOs in Loss metric keeps track of cases when a large number of UTXOs are worth less than their original purchase prices. The current data reveals that there are more UTXOs in loss compared to the March 2020 crash.

During the March 2020 crash, the BTC/USD price dropped by 60%, reaching its lowest levels since March 2019. However, these lows were never seen again. CryptoQuant contributor Woominkyu suggests that the current situation with UTXOs in Loss indicates that Bitcoin may be experiencing a similar “curveball selling event” and could potentially be bouncing back from it. Those anticipating another disruptive event resembling the Black Swan event in March 2020 may need to consider whether such an event is already in progress.

The data reveals that 38% of UTXOs were in loss by the end of August, a figure not seen since April 2020. This suggests that if many UTXOs are in loss, investors may be more likely to sell, indicating market anxiety. Conversely, when most UTXOs are profitable, it signifies an optimistic outlook and stronger holding sentiment among investors.

In the meantime, Bitcoin remains trapped in a tight range, lacking an overall price trend. This is evident from the cost basis data, which shows that the current spot price is influenced by the acquisition prices of various investor cohorts. The “Realized Price” of Bitcoin, which is calculated by dividing the price at which the supply last moved by age group, reveals that short-term holders experience losses when BTC/USD is below approximately $27,000. However, there has yet to be a full capitulation event recorded on-chain.

It is important to note that this article does not provide investment advice or recommendations. Any investment or trading decision carries risks, and individuals should conduct their own research before making a decision.

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