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).

CryptoQuant: Bitcoin UTXOs in Loss “mirror” March 2020

Bitcoin may be worrying market participants with current BTC price weakness, but on-chain data paints an intriguing picture of activity “under the hood.”

How To Get Free Crypto  

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.

Coinbase Banner  

He summarized:

“Given that the current level of the ‘UTXOs in loss’ indicator mirrors that of the Black Swan event between March and April 2020 (due to the Coronavirus), those anticipating another Black Swan event might want to consider whether we are already in the midst of the event they are waiting for.”

Bitcoin UTXOs in loss chart. Source: CryptoQuant

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.

Underwater Bitcoin speculators grow

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 cohorts.

This “Realized Price” — the price at which the supply last moved, divided by age group — shows that short-term holders fall into aggregate loss when BTC/USD is below around $27,000.

FreeBitcoin Banner  

A full capitulation event, however, has yet to be recorded on-chain.

Bitcoin Realized Price chart (screenshot). Source: CryptoQuant

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Go to Source
Author: William Suberg

Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.