Bitcoin UTXO losses hit bear market low as 50K BTC moves at a loss

Bitcoin's on-chain data flashes a capitulation signal that has marked bear market bottoms before, as short-term holders move 50,000 BTC to exchanges at a loss.

Bitcoin fell to $59,800 before recovering to $60,100 as of 06:00 UTC on June 28, after on-chain data showed the UTXO profit-loss ratio dropping to its lowest level this bear market cycle, according to CryptoQuant.

"These periods have always been profitable for long-term investors," Darkfost, an analyst at CryptoQuant, said. "They correspond to the moment when the majority gives up and loses interest."

The Spent Output Profit Ratio for long-term holders is increasingly moving into negative territory, Darkfost added, confirming that this cohort is entering a capitulation phase. Around 50,000 BTC from short-term holders moved to exchanges at a loss during the past 24 hours, the largest loss-to-exchange flow since June 4. Binance alone received roughly 9,500 BTC under similar conditions, its highest reading since June 3.

"The bottom signal I've been waiting for just fired," analyst DurdenBTC said. "It's caught every cycle low since 2016, and it will still feel terrible for weeks."

The capitulation data comes as macro conditions remain unfavorable for risk assets. Headline PCE inflation came in at 4.1% against expectations of 4.0%, while Core PCE printed 3.4% versus the 3.3% forecast. GDP also exceeded estimates at 2.1%, keeping expectations for easier monetary policy subdued. The Coinbase Premium Index has stayed below zero for 40 consecutive days since May 15, pointing to sustained selling from professional investors.

"This dynamic is a perfect reflection of the current macro backdrop, which remains deeply unfavorable for risk assets such as BTC," Darkfost said.

Long-term holders are absorbing the supply that short-term investors are offloading. Bitcoin inflows into accumulation addresses climbed to a record 181,000 BTC on June 25, almost doubling the previous high of 94,700 BTC recorded in February 2022. The divergence between panicked short-term sellers and accumulating long-term holders mirrors patterns seen at prior bear market bottoms.

Bitcoin's 50-week simple moving average at $89,771 is approaching its 100-week average at $88,397, setting up a potential bear cross. The three prior instances of this cross in Bitcoin's history each marked a market bottom and the beginning of a multiyear rally, according to historical data.

Still, realized losses remain well below historic capitulation levels. Current realized losses stand at about 234,000 BTC, compared with roughly 1.20 million BTC during the 2022 bear market bottom, suggesting full-scale panic selling has not yet materialized.

This article is for informational purposes only and does not constitute investment advice.