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Bitcoin's recovery from a significant downturn seems reminiscent of the turmoil it faced in March 2020 due to the COVID-19 pandemic, recent data indicates.
On September 7, insights from the renowned on-chain analytics tool, CryptoQuant, showcased a sharp uptick in Bitcoin transactions that resulted in losses, known as unspent transaction outputs (UTXOs).
These UTXOs denote the remaining Bitcoin post any on-chain transaction. A particularly interesting metric from CryptoQuant monitors when a significant chunk of UTXOs is now valued higher than its purchase rate. It appears that, currently, a considerable amount of UTXOs are at a loss, a situation echoing March 2020 figures.
Back in March 2020, Bitcoin saw a staggering 60% drop, marking its lowest value since March the previous year, a dip that fortunately hasn't been replicated since. Drawing parallels with the present-day UTXO data, CryptoQuant's Woominkyu hypothesizes that Bitcoin might be in the midst of, or rebounding from, another unexpected downturn.
Woominkyu commented on the current "UTXOs in loss" level, noting its resemblance to the Black Swan event that occurred from March to April 2020, a fallout of the COVID-19 outbreak. Woominkyu suggests that those anticipating a similar event should consider whether the present situation mirrors that earlier phase.
As of the close of August, 38% of UTXOs were at a loss, a percentage reminiscent of April 2020 figures. Presently, Bitcoin's market movement seems constrained. As traders anticipate a potential market shift, Bitcoin's current value seems to be oscillating between various investment groups' purchase rates.
This fluctuation in "Realized Price," which refers to the latest moved supply's price, segmented by age groups, demonstrates that brief duration holders experience collective losses if Bitcoin's value dips below approximately $27,000. Nonetheless, a total market surrender is yet to manifest on the blockchain.
