UTXO_N_LTH_in_Loss

Tech spec

Brief Description: ** The count of UTXOs held at a value lower than their purchase price.

UTXO_N_LTH_in_Loss represents the amount of Unspent Transaction Outputs (UTXOs) that are currently held at a value inferior to their purchase price. This indicator is primarily used in on-chain analysis to understand the proportion of Bitcoin supply that is in a state of loss from an investment perspective.

Interpretation Analyzing UTXO_N_LTH_in_Loss allows investors to anticipate potential selling pressure and gauge the resilience of Bitcoin holders. A high UTXO_N_LTH_in_Loss suggests that many investors are holding coins at a loss, which could either lead to selling pressure (as investors capitulate) or indicate a strong potential for a price floor (as investors hold through the dip, expecting a recovery). Conversely, a low UTXO_N_LTH_in_Loss implies that most investors are in profit, which could either point to a potential for profit-taking or confidence in further price appreciation depending on market conditions.

Advanced Explanation UTXO_N_LTH_in_Loss provides insights into market sentiment and potential behavior of investors by gauging the degree of unrealized loss in the market. The metric is calculated by comparing the current price of Bitcoin to the price at the time each existing UTXO was created. If the current price is lower, those UTXOs are considered to be held at loss.

This metric is obtained by mesuring the difference between each UTXO price at acquisition and the current price:

UTXO_N_LTH_in_Loss = (Number of UTXOs where last movement price < current price)

To be clear, it's worth noting that a UTXO's purchase price is supposed from the price at the time of its last movement, not necessarily its first acquisition.