On-chain data reveals that the Bitcoin supply in loss has surged close to the 20% mark following a recent downturn in the coin’s price. This increase in the Bitcoin Unspent Transaction Output (UTXO) Supply in Loss indicator has caught the attention of analysts and investors alike.
The UTXO Supply in Loss indicator, as explained by CryptoQuant author Axel Adler Jr in a recent post on X, measures the percentage of UTXOs in circulation that are currently held at a net unrealized loss. By analyzing the on-chain history of each UTXO, the indicator determines whether the cost basis of the token is higher than the current spot price of the cryptocurrency, indicating that the UTXO is underwater.
The chart shared by the analyst illustrates the trend in the Bitcoin UTXO Supply in Loss over the asset’s history. Following Bitcoin’s all-time high in March of this year, the indicator plummeted to zero, signifying that all investors were in profit. However, as the price of Bitcoin has experienced a downward trend in recent months, the UTXO Supply in Loss has seen a notable increase.
The 90-day moving average of the indicator is now approaching the 20% mark, a level that has historically preceded price rallies for Bitcoin. Axel Adler Jr points out that previous cycles have shown similar retests of this level, often followed by a surge in price. This suggests that a price rally may be on the horizon for Bitcoin.
The rise in the UTXO Supply in Loss can be viewed as a bullish signal for Bitcoin, as it indicates that fewer investors are in profit and therefore less likely to sell their holdings. This reduction in selling pressure could pave the way for a potential price increase in the near future.
In terms of current price action, Bitcoin has recently shown some recovery above the $64,000 level before retracing back to $62,500. The price chart reflects the volatility and fluctuations that have characterized the cryptocurrency market in recent weeks.
Overall, the increase in the Bitcoin UTXO Supply in Loss highlights the shifting dynamics within the market and suggests that a potential price rally may be imminent. Investors will be closely monitoring these developments to capitalize on potential opportunities in the ever-evolving world of cryptocurrency.