Key takeaways
- Cryptoquant data shows Bitcoin investors are realizing losses at a rate never before seen in the current correction, with a key on-chain signal flashing again.
- The latest data indicates an increase in trades leading to losses, a trend seen during periods of high selling pressure.
- More and more bitcoins are now trading below cost basis, a condition linked to volatile phases of past market cycles.
Bitcoin Metric Falls to Levels Last Seen Near Market Lows
Market data shows bitcoin investors are increasingly realizing losses, with a key on-chain indicator issuing a capitulation signal for the first time during the current correction. On June 29, Cryptoquant contributor Darkfost shared an analysis on UTXO The block’s profit/loss count ratio has fallen into a range historically associated with bear market conditions.
The model measures the balance between bitcoin transactions carried out in profit and those carried out at a loss by analyzing UTXOtransaction results that record coin ownership and cost basis on the Bitcoin blockchain. The analysis indicates that “ UTXO analysis indicates investor capitulation is underway,” adding:
“This is the first time this signal has been triggered since the correction began.”
The falling ratio shows that more spending UTXO are carried out at a loss compared to the previous stages of the correction. Historically, the indicator rose during periods dominated by profit-taking and fell sharply as realized losses became widespread across the network.
Historical Chart Shows Similar Signals During Previous Bitcoin Bear Markets
Historical data displayed in the Cryptoquant chart included with the analysis places previous signals around major bitcoin declines in 2016, late 2018, 2020 and 2022. Each blue marker appeared after the ratio fell to depressed levels, indicating that realized losses had become increasingly common before subsequent market recoveries.
The analysis describes the latest readings as the start of a broader capitulation process rather than a single market event. He adds that these periods play out over longer periods of time, as more investors exit their positions and interest in the market fades.
Commenting on the analysis, Quinten François, a crypto analyst and co-founder of WeRate, renamed Lokal, wrote on X on June 29:
“This metric has flashed at every dip in the Bitcoin cycle since 2016. And it flashed again.”
The indicator is entirely derived from completed on-chain transactions rather than price action or positioning of derivatives. It tracks actual investor behavior recorded on the Bitcoin blockchain, providing a historical measure of when loss realization reached levels that previously corresponded to several major lows in the Bitcoin cycle.
