UTXO_N_in_Loss_LTH(%)

Tech spec

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

UTXO_N_in_Loss_LTH(%) represents the percentage 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_in_Loss_LTH(%) allows investors to anticipate potential selling pressure and gauge the resilience of Bitcoin holders. A high percentage 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 percentage 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_in_Loss_LTH(%) 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 dividing the number of UTXOs in loss by the total number of UTXOs and then multiplying by 100 to get a percentage:

UTXO_N_in_Loss_LTH(%) = (Number of UTXOs in Loss / Total UTXOs) * 100

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.