I’m seeing more and more indicators reaching extreme values, suggesting that the BTC market is entering a genuine devaluation phase.

UTXO analysis, represented here by a net supply ratio, reveals that we’re entering a phase where accumulation becomes relevant.

UTXOs (Unspent Transaction Outputs) are a mechanism specific to Bitcoin that ensures a BTC has only been spent once.

These UTXOs therefore contain information (price, dates, amount) that allows us to analyze what’s happening on-chain and deduce behaviors from it.

This ratio has now been negative for a week and just reached -0.075, corresponding to a buy signal.

The last time this happened was at the end of 2022, right at the end of the bear market.

This isn’t an indicator dedicated to detecting tops and bottoms; its purpose is to help position oneself relative to a global supply that could find itself with either large profits or larger losses.

Since it depends on the profit and loss of UTXOs, it can very well signal something during either a sharp drop or a sharp rise.

That said, in terms of cyclicality, it wouldn’t be inconsistent to think that the end of this bear market could be approaching.

This won’t stop BTC from going lower, but we now have several signals pointing to seller exhaustion. The next step is a renewal of demand, and that could take some time.

Written by Darkfost