Bitcoin UTXO profit-loss ratio hits cycle low as analysts whisper the B-word 🧊

A long-watched Bitcoin onchain metric has fallen to its lowest level of the current bear market, prompting several analysts to declare that a broader capitulation phase is underway. CryptoQuant contributor Darkfost said Saturday that the ratio of unspent transaction outputs (UTXOs) spent in profit versus at a loss has dropped sharply, the first such trigger since the start of the correction. "Demonstrating that the number of UTXOs spent at a loss is reaching significant levels, reflecting the start of a broader capitulation," he wrote, adding that the signal has historically coincided with bear market bottoms. The last comparable reading occurred in mid-2023, when $BTC fell to roughly $26,000. "These periods have always been profitable for long-term investors," Darkfost said. "They correspond to the moment when the majority gives up and loses interest," though he cautioned that the process takes time and operates on a long timeframe.

Independent analyst DurdenBTC echoed the call, writing on Saturday, "The bottom signal I've been waiting for just fired," and noting that the indicator "has caught every cycle low since 2016." He added, "It will still feel terrible for weeks. If buying here were comfortable, the signal wouldn't exist." In a follow-up post, Darkfost said long-term holders are beginning to "enter a capitulation phase," with the Spent Output Profit Ratio (SOPR) increasingly moving into negative territory for that cohort. He attributed much of the selling to a rapid increase in $BTC inflows to exchanges from short-term holders. Onchain analytics firm Swissblock said Saturday that Bitcoin has likely moved beyond its initial breakdown but remains in a "base formation phase," adding, "Price is stabilizing, yet momentum remains deeply negative, and Bitcoin impulse has only just returned to neutral."

Uncertainty has been compounded by resumed US military action in the Middle East. Central Command reported that US fighter jets struck 10 Iranian military targets at multiple locations in and near the Strait of Hormuz late Saturday in response to an Iranian drone attack on a commercial ship. $BTC dipped to $59,800 in early Sunday trading before recovering to $60,100 at the time of writing.