Bitcoin (BTC) Market Correction Signs Flash as UTXO Loss Ratio Hits 2020 Bull Cycle Levels

A key metric in Bitcoin is flashing signs of an impending market correction. CryptoQuant’s latest insights shed light on BTC’s UTXO loss ratio

A crucial metric in Bitcoin is hinting at an impending market correction, according to the latest analysis by CryptoQuant. The metric, known as UTXO loss ratio, showcases the percentage of coins that are being held at a loss. As of now, this ratio has reached levels that were last observed during the major market downturn of the 2020 bull cycle, sparking concerns among traders.

The UTXO loss ratio, which is calculated by dividing the total output value of unspent transaction outputs (UTXOs) at a loss by the total UTXO output value, provides insight into the overall market sentiment and the traders' average cost basis. Higher ratios indicate that a greater proportion of coins are being held below the current market price.

According to the analysis, a high percentage of Bitcoin in the loss range was observed in 2024, which corresponds to the period of the large correction during the 2020 bull cycle. The market crash in 2020 was particularly severe due to the COVID-19 pandemic, which led to a sharp sell-off in traditional markets and limited capacity for stimulus.

However, market experts are hesitant to conclude that the same scenario will repeat itself. While the current economic conditions are concerning due to factors such as inflation, debt levels, and geopolitical tensions, the Federal Reserve has already initiated a tightening cycle, which may limit its ability to provide robust stimulus measures like quantitative easing.

As the market continues to experience turbulence,ксперты caution against prematurely declaring a bear market, emphasizing the need for further analysis and confirmation. They recommend paying close attention to both on-chain metrics and macroeconomic indicators to fully assess the market's direction.

In related news, Bitcoin's short-term price movement has revealed an interesting trend, according to further analysis. The token has recently made a significant price move, absorbing liquidity from the recent low and reaching a new all-time peak. The analysis highlights how BTC's price has maintained its structure with consistent daily candle closes above previous lows.

While technical indicators may suggest a potential bottom formation around the large volume candle, it's important to remember that the geopolitical factors could also be influencing the market. Keep an eye out for any attempts to reclaim key levels, such as the 62k region, as they will strengthen the possibility of a local bottom. However, given the current global economic climate, be sure to also monitor broader market trends and their impact on Bitcoin.

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