UTXO_N_in_Profit_STH

Tech spec

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

UTXO_N_in_Profit_STH represents the amount of Unspent Transaction Outputs (UTXOs) that are currently held at a value superior 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 profit from an investment perspective.

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

Advanced Explanation UTXO_N_in_Profit_STH provides insights into market sentiment and potential behavior of investors by gauging the degree of unrealized profit 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 higher, those UTXOs are considered to be held in profit.

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

UTXO_N_in_Profit_STH = (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.