Bitcoin Percent UTXOs in Profit

UTXOs in Profit/Loss

UTXOs are considered in profit if the current market price of Bitcoin exceeds the price at which they were last moved (created). Conversely, they are in loss if the current market price is lower than their creation price. This metric counts the number of UTXOs falling into each category to gauge the overall sentiment among Bitcoin holders.

These metrics are vital for several reasons:

Investor Sentiment: They indicate whether the majority of Bitcoin holders are in a profitable or losing position, influencing market sentiment.

Market Cycles: Historically, high percentages of UTXOs in profit correlate with market tops, while low percentages often signal bottoms, providing insights into potential buying or selling opportunities.

Long-Term Perspective: They help investors understand the durability of Bitcoin's valuation over time, aligning with its role as a Store of Value (SoV).

Percent UTXOs in Profit

The percent of UTXOs in profit measures what portion of the total circulating UTXOs are currently valued higher than their creation price. It is calculated by dividing the number of UTXOs in profit by the total number of UTXOs in circulation and expressing it as a percentage. This metric provides a snapshot of how bullish or bearish investors are regarding Bitcoin's current price relative to historical levels.

Real-World Application

During bullish periods like the 2017 bull run, high percentages of UTXOs in profit were sustained, indicating widespread profitability among Bitcoin holders. Conversely, during market corrections, the percentage of UTXOs in profit may decrease significantly, suggesting widespread losses and potential capitulation.