Bitcoin's Recovery and Emerging Market Anxiety: Analyzing UTXOs and Investor Sentiment
Summary:
Bitcoin is recovering from a "black swan" event, similar to the crash in March 2020. On-chain data reveals a rise in loss-making unspent transaction outputs (UTXOs), indicating market anxiety and potential selling among investors. Short-term holders incur losses when BTC/USD is below $27,000. This article emphasizes the importance of conducting personal research before making any investment decisions.
Bitcoin (BTC) is undergoing a recovery similar to the aftermath of the March 2020 COVID-19 crash, as new data indicates. In a recent report, on-chain analytics platform CryptoQuant revealed a significant surge in loss-making unspent transaction outputs (UTXOs). These UTXOs represent the remaining BTC after a transaction is completed, and the data shows that a greater number of them are currently in a loss compared to their original acquisition price. This similarity to the situation in March 2020 raises the possibility that Bitcoin is experiencing or recovering from a curveball selling event. This data suggests that market participants waiting for another "Black Swan" event should consider whether it is already happening. At the end of August, 38% of UTXOs were in a loss, a figure not seen since April 2020. The greater number of UTXOs in loss indicates market anxiety and a potential inclination to sell among investors. On the other hand, when most UTXOs are profitable, it reflects a positive outlook and stronger holding sentiment. Despite remaining within a narrow range, Bitcoin's price has not shown a clear trend, and the cost basis data reveals that short-term holders incur losses when BTC/USD is below roughly $27,000. However, a full capitulation event has not yet been recorded on-chain. It is important to note that this article does not provide investment advice or recommendations, and readers should always conduct their own research before making any decisions.
Published At
9/10/2023 12:30:05 PM
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