Bitcoin UTXOs echoing March 2020 'black swan' crash — New research
Bitcoin (BTC) is recovering from a “black swan” event last rivaled by the March 2020 COVID-19 crash, data suggests.
In one of its Quicktake posts on Sep. 7, on-chain analytics platform CryptoQuant revealed a major spike in loss-making unspent transaction outputs (UTXOs).
Bitcoin may be worrying market participants with current BTC price weakness, but on-chain data paints an intriguing picture of activity “under the hood.”
UTXOs represent BTC left over after an on-chain transaction is executed. CryptoQuant’s UTXOs in Loss metric tracks when large numbers of these UTXOs are worth more than they were when the BTC was originally bought.
Currently, more of these are in loss compared to their original acquisition price than at any time since March 2020.
At the time, BTC/USD dropped 60% to its lowest levels since March 2019 — lows which were never seen again.
Considering the current data from UTXOs in Loss, CryptoQuant contributor Woominkyu ventured that, like March 2020, Bitcoin may be seeing, or already bouncing back from, a curveball selling event.
He summarized:
In percentage terms, 38% of UTXOs were in loss at the end of August, a figure last seen in April 2020.
“When many UTXOs are in loss, investors might be more inclined to sell, hinting at market anxiety. Conversely, when most UTXOs are profitable, it suggests an optimistic outlook and a stronger holding sentiment among investors,” Woominkyu added.
Bitcoin meanwhile remains locked in a tight range amid a lack of overall BTC price trend.
Related: Bitcoin speculators now own the least BTC since $69K all-time highs
With neither a breakout nor breakdown willing to complete, cost basis data likewise shows current spot price caught between the acquisition prices of various investor
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