UTXO Profit/Loss Ratio Reaches Historical Bottom Zone
According to CryptoQuant analyst MorenoDV_, Bitcoin's UTXO (Unspent Transaction Output) block profit/loss ratio has fallen into the range typically observed during historical bear market bottoms. This on-chain metric tracks the proportion of profitable versus loss-making transactions within each block. A low reading indicates the market is undergoing deep internal cleansing, where loss-making investors are forced to sell, thereby reshuffling the holder base.
The analyst notes that while this signal has historically preceded market troughs, the current level only indicates that the cleansing phase is underway—not that the bottom is already in place. True bottoms historically require more time and further price deterioration to form.
365-Day Moving Average: The Key Verification Signal
MorenoDV_ stresses that to confirm a full reset of the market's long-term profitability structure, the 365-day moving average (MA) must decline more significantly. Short-term oversold conditions alone are insufficient to mark a bottom. Although short squeezes could produce temporary rallies, unless the profit/loss ratio persistently rebuilds an upward trend, these bounces should not be interpreted as structural recovery signals.
In summary, early signs of internal cleansing are visible, but historical patterns suggest the market may still need to endure more pressure before emerging from the current bear cycle. Investors are advised to remain cautious and closely monitor both the UTXO profit/loss ratio and the trajectory of the 365-day MA. As a leading on-chain data platform, CryptoQuant's model signals are worth following, but no single indicator can independently confirm a market inflection point.