Bitcoin has fallen more than 16% in the past week, falling from a high of around $76,000 to a level currently trading at $62,000. The largest cryptocurrency is now down almost 50% from its all-time high reached in October last year. Heavy flows from ETFs and bearish headlines from Mount Gox Add sell-side pressure The strategy’s first BTC sale Since 2022 it has contributed to most of the damage. This sell-off has pulled a large portion of the market underwater.
Onchain data from Queen Glass It shows that the number of lost Bitcoin UTXOs rose to over 165 million this week on June 2, the highest reading ever recorded. With Bitcoin hovering around the low $60,000 region, more coins are now being held below their cost than at any time in Bitcoin’s history.
What “UTXOs at Loss” actually tracks
UTXO, which is short for Unspent Transaction Output, is Bitcoin or sats sitting in a wallet that have not been transferred since it was received. Each one carries a price, the value of BTC the last time it was traded. When the spot price of BTC falls below this level, then UTXO is seen as being at a loss. This does not mean that anyone has sold or locked up anything. On paper, this just means that the coins are worth less than they cost to obtain. The 165 million figure means that a record segment of the network holds bags purchased at higher levels.
While the number of UTXOs in loss is actually at an all-time high, the number itself has a nuance worth explaining. During the 2022 bear market lows, that number was around 40 million. The reason why this number has gone up so much during this patch is for the simple reason that the number of UTXOs on the network has skyrocketed due to the acceleration of exchange activity and the boom of Ordinals over the past four years. This has doubled the number of discrete outputs on the chain. There are more UTXOs than ever before, so a greater range of loss is partly mechanical.
So the best reading of sentiment on this front would be a loss in supply. This measure excludes growth in total output and shows how much Bitcoin actually trades underwater. When looking at where this data currently resides, over 9.5 million Bitcoins of supply have been lost. However, this is not out of the ordinary and is actually still below the extremes seen in the bear markets of 2022 and 2019.
The line in the sand for viewing
The metric worth tracking now is the realized price, which is currently around $53,500. It is the basis of the total cost of each coin on the network, based on the price at which each coin last moved. In past bear markets it served as a floor. In both previous bear markets, Bitcoin briefly fell below this level and both times were great entries for investors. For now, the broader shareholder base is profitable. A slide towards $53.5K, an additional 15% retracement from current levels, will be the real test. The current gap between $62k and the realized price gives bulls some breathing room, but the 165 million coin loss is a stark reminder of how far the market is staring at this level.
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