Bitcoin market shows signs of cooling as the Block Profit and Loss Ratio drops significantly, signaling a shift.
UTXO Block P/L Count Ratio helps predict Bitcoin market cycles, with loss surges indicating potential market corrections.
Moving averages highlight turning points, suggesting Bitcoin may face consolidation before the next price surge.
Bitcoin (BTC) is showing signs of a market cooling off, according to the Block Profit and Loss (P/L) Count Ratio model. This indicator, which tracks Bitcoin's profit and loss within each 10-minute block, has seen a decline. After investors secured maximum profits at levels between $90K and $100K, the metric dropped from over 100K to 159. Axel Adler Jr., the analyst behind the model, suggests that if the current demand remains unchanged, Bitcoin will not stay at these levels for long.
UTXO Block P/L Count Ratio Model Reveals Market Behavior
The UTXO Block Profit and Loss Count Ratio model combines key on-chain metrics with Bitcoin's price movements. The black line represents BTC's price in USD, mapped logarithmically from 2014 to 2025. Gray lines show the UTXO Block Profit and Loss counts, which capture transaction outcomes across the timeline. A magenta line marks the Ratio, set at 156.9 as a threshold for profitable versus unprofitable UTXO blocks.
Spikes in the UTXO Block Loss Count coincide with market bottoms, such as in 2015, 2018, 2020, and late 2022. These spikes often signal market capitulation, where many holders realize losses. Conversely, high UTXO Block Profit Counts correlate with market peaks, as seen in 2017, 2021, and 2023.
Moving Averages Indicate Potential Turning Points
There are Simple Moving Averages (SMA) for 7, 30, and 365 days. These moving averages smooth the Ratio data and highlight emerging trends. Convergence of these SMAs often signals turning points in market behavior. During BTC rallies, the Ratio often exceeds the magenta threshold, indicating a market dominated by profitable transactions.
Additionally, the model identifies price consolidation periods with shaded regions. These orange-shaded areas in 2016-2017 and 2019-2020 mark accumulation phases before price surges. These periods generally precede sharp price increases when the UTXO Block Ratio crosses critical levels.
Market corrections in 2018, 2021, and late 2022, show similar loss-count surges. During these periods, the Ratio frequently drops below key levels, signaling bearish trends. Recovery phases follow these corrections, with profit counts increasing as the price rebounds.
