On May 21st, leading crypto analyst Axel Adler Jr. from CryptoQuant shared pivotal insights on market dynamics via social media. He highlighted a critical metric: the 30-day Simple Moving Average (SMA) of the Unspent Transaction Output (UTXO) Profit/Loss Ratio. This indicator often escalates to levels above 200 during strong upward price movements, suggesting that a significant portion of previously unprofitable tokens are turning a profit. Currently, this ratio sits at 99, indicating that the market is not yet in an ‘overheated’ state.
If this SMA surpasses the 200 threshold, it could signal an impending wave of investor euphoria, fueling further market rallies. However, analysts caution that as this ratio approaches critical levels, the ‘easy fuel’ driving upward momentum could deplete, necessitating robust price action or heightened volatility to sustain growth. According to Adler, the current phase of market ‘compression’ may be essential for propelling the indicator beyond the 200 mark.