A sharp decline in the share of Bitcoin addresses holding coins at a loss has on-chain analysts debating whether the prolonged bear market is finally winding down. The shift in unspent transaction output, or UTXO, data comes even as two macro headwinds — a Federal Reserve rate hike and the stalled CLARITY Act in the Senate — failed to push the cryptocurrency meaningfully lower.
Bitcoin (BTC) was trading above $76,000 at the time of writing, up about 1% over the past 24 hours but down roughly 3% for the week. The resilience has caught the attention of market watchers who see parallels with previous cycle bottoms.
Crypto Dan, an on-chain analyst, pointed to the falling proportion of UTXOs sitting below their holders’ cost basis. UTXOs represent the individual chunks of BTC held in wallets, each with its own acquisition price. When a large share of these units trade at a loss, it typically signals capitulation. The recent decline in that metric, he argued, has historically marked the end of bear phases rather than a temporary rebound.
“Looking at previous market cycles, declines of this scale have represented more than just short-term rebounds,” Crypto Dan wrote. “They have shown enough momentum to bring bearish phases to an end and transition the market into a bullish cycle.”
The analyst acknowledged the rate hike and the legislative setback as near-term risks but said neither had been sufficient to derail the shift already underway.
The Two Key Price Levels
Darkfost, an analyst at CryptoQuant, offered a complementary view based on cost-basis thresholds. Bitcoin is currently holding above $71,300, a level that reflects the break-even point for coins actively moving through the market. He noted that this same level was tested twice near the end of the 2023 bear market before the subsequent rally took hold.
On the upside, $79,800 represents the break-even point for invested capital. Bitcoin has been rejected at that level multiple times, a pattern Darkfost also traced back to the 2023 period. The result is a compression zone between the two thresholds, with $71,300 acting as near-term support and $79,800 as resistance.
| Key Level | Significance |
|---|---|
| $71,300 | Break-even for actively traded BTC; tested twice near end of 2023 bear market |
| $79,800 | Break-even for invested capital; repeatedly rejected in recent weeks |
| $76,000+ | Current trading range as of latest data |
Note: Levels cited by CryptoQuant analyst Darkfost based on on-chain cost-basis indicators.
Macro Shocks Fail to Break the Market
The two events Crypto Dan flagged have already occurred. On September 15, the Senate failed to advance the CLARITY Act, falling short of the 60 votes required. Bitcoin dipped on the news but the selling was short-lived. The following day, the Federal Reserve raised interest rates by 25 basis points, its first hike in three years. Bitcoin climbed back above $76,000.
Matt Hougan, chief investment officer at Bitwise, argued that the rally has little to do with regulatory expectations. He noted that Bitcoin rose approximately 38% between July and mid-September even as betting markets cut the odds of CLARITY Act passage from 39% to 18%.
Trader Matthew Hyland ridiculed predictions that the failed vote and rate increase would send Bitcoin to $50,000. He pointed to the cryptocurrency holding near $76,000 as evidence those scenarios never materialized.
David Bailey, a longtime Bitcoin advocate, offered a more forceful interpretation, calling the muted reaction to negative news “the strongest sign yet that the bear market is over.” He described the current environment as a “bad news doesn’t matter phase.”
Volume and Longer-Term Picture
Trading volume has cooled alongside the price action. Daily volume fell approximately 24% to $29.5 billion. Zooming out, Bitcoin is up around 19% over the past 30 days, though it remains down roughly 35% over the past year and trades about 39% below its all-time high from last October.
The divergence between short-term resilience and longer-term losses underscores the uncertainty. Crypto Dan’s UTXO analysis suggests the market may be transitioning, but he stopped short of declaring a definitive bottom. Darkfost’s framework offers concrete levels to watch: a break above $79,800 would strengthen the bullish case, while a loss of $71,300 would put the current structure back into question.
For now, Bitcoin’s ability to absorb two significant macro shocks without breaking down has shifted sentiment among some analysts. The UTXO data provides an on-chain foundation for that optimism. Yet the compression between $71,300 and $79,800 remains unresolved, and until that range breaks, the question of whether a new bull cycle has truly begun remains open.