The Bitcoin Advanced Net UTXO Supply Ratio chart has generated a buy signal for the first time since November 2022, indicating potential short-term recovery. However, mining companies are offloading BTC to cover costs, and high retail leverage could foreshadow a longer-term downturn.
Bitcoin is showing signs of upward momentum after nearly two weeks of capital outflows from related exchange-traded funds, according to data from Farside Investors. This shift in investor confidence suggests a short-term price bounce, with the next target being a local resistance zone.
Crypto analyst Axel Adler Jr. highlighted the Bitcoin Advanced Net UTXO Supply Ratio chart, a metric tracking the net balance of BTC supply in profit versus loss. The ratio recently plunged into deeply negative territory, triggering a green "BUY" signal on the chart. Historically, such a signal has preceded market bottoms and recoveries from cyclical lows, as observed in November 2022.
However, the current scenario also involves mining firms like Riot Platforms, Mara Holdings, and Hut 8 Mining Corp. liquidating their BTC holdings due to rising operational costs. Analyst Crypto Onchain noted a sharp increase in miner outflows, indicating these entities are selling to cover expenses. Funding rates remain positive while miners sell spot holdings and smaller retail investors attempt to buy the dip.
This pattern-legacy supply entering the market alongside high retail leverage-has historically preceded sustained price declines and long squeezes. While the buy signal suggests potential short-term gains, the confluence of miner selling and excessive retail leverage raises concerns about a deeper correction later in the cycle
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