[Analysis] "Bitcoin resembles May 2022…many investors in a loss zone"

An analysis suggests the current Bitcoin (BTC) market is showing a pattern similar to 2022, when it was in a bear market.

A CoinDream contributor to CryptoQuant said on the 4th (local time) via CryptoQuant that “a stress pattern similar to May 2022 is emerging in the current market.” CoinDream said “the share of ‘unspent transaction outputs (UTXO)’ that are in loss has entered the 27–30% range,” adding that this “means a substantial portion of market participants has moved from being in profit to being in unrealized loss.” UTXO refers to cryptocurrency created in a previous transaction but not yet spent.

CoinDream analyzed that “historically, this range has served as a ‘decision zone’ where market pressure determines direction.” CoinDream said that “when the indicator rose above 30% and then held at that level, loss-held supply tended to accumulate, often leading into a further downturn.” It added that “by contrast, when the indicator stalled or declined within the 27–30% band, selling pressure was gradually exhausted and a move toward trend recovery was repeatedly observed.”

The assessment is that the Bitcoin market has reached a critical point. CoinDream said, “In this context, the 27–30% range can be interpreted not as a zone that predicts the future, but as a structural threshold that reveals whether the market can absorb the current stress, or whether fear has already been largely priced in.” It added, “The current phase is closer to a stage testing how much fear has already been reflected in prices, rather than the beginning of fear.”