Bitcoin is in the midst of a recovery journey after enduring a “black swan” event reminiscent of the turbulent days of the March 2020 COVID-19 crash, according to recent data.

On September 7, CryptoQuant, an on-chain analytics platform, brought attention to a significant surge in loss-making unspent transaction outputs (UTXOs), revealing a curious tale of Bitcoin activity “under the hood.”

UTXOs signify the remaining BTC following an on-chain transaction, and CryptoQuant’s “UTXOs in Loss” metric tracks instances where these UTXOs are currently worth less than their original acquisition price.

The data shows that more UTXOs are currently in a loss position compared to their initial purchase price than at any point since March 2020.

Back then, the BTC/USD price plummeted by a staggering 60%, reaching its lowest levels since March 2019, which it never revisited.

Drawing parallels with March 2020, CryptoQuant contributor Woominkyu suggested that Bitcoin may be experiencing, or even recovering from, a surprise selling event, akin to a “black swan.”

He stated that those anticipating another “black swan” event should contemplate whether it is already unfolding.

In terms of percentages, 38% of UTXOs were in a loss position at the close of August, a level not witnessed since April 2020.

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Woominkyu explained that when numerous UTXOs are in a loss position, it can indicate heightened market anxiety, potentially prompting more investors to sell.

Conversely, when most UTXOs are profitable, it suggests optimism and stronger investor sentiment.

Bitcoin, however, remains ensnared in a narrow trading range, with no clear trend emerging in its price.

The cost basis data reveals that the current spot price is hovering between the acquisition prices of different investor cohorts.

The “Realized Price,” which is calculated as the price at which the supply was last moved divided by age group, shows that short-term holders face losses when BTC/USD dips below approximately $27,000.

Nevertheless, a complete capitulation event has yet to manifest on-chain.

In conclusion, despite the recent turbulence in Bitcoin’s UTXOs and price activity, the crypto market is witnessing intriguing dynamics reminiscent of the “black swan” event of March 2020, leaving market participants pondering the future trajectory of the leading cryptocurrency.

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