CryptoQuant analysts informed that a lot of bitcoin investors have been selling at a loss recently since the asset’s price is a long way from its highest levels from a year ago.
However, the percentage of investors dumping their possessions now might not be enough to mark a bear market bottom.
Citing the aSOPR (adjusted SOPR), which operates similarly to the standard SOPR but excludes all BTC transactions with a lifespan younger than one year, CryptoQuant’s analysis suggested that many investors are selling their bitcoin holdings at a loss now.
As such, this could provide a good narrative that the primary cryptocurrency had finally bottomed following the massive price decline experienced in the past year.
However, the strategist warned that the situation is not that simple, at least according to another metric – UTXO.
The unspent transaction output (UTXO) is the amount of the underlying cryptocurrency (in this case, BTC) that is left after a transaction. CryptoQuant asserted that 70% of the UTXO is still profitable, but it was way below 50% during the past few bear markets.
“Most of the people who are selling at a loss now are relatively recent participants. The real bottom comes when more than half of investors in the entire cycle, including this, lose money.” – reads the analysis.
Bitcoin Price and UTXO. Source: CryptoQuant
Trading at $src6,500 now means that bitcoin is down by around 75% since its all-time high charted last November. However, another popular crypto analyst recently warned that the asset could further drop to as low as $9,500 if it’s to mimic the previous bear markets and, indeed, find a bottom.
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