As the chart shows, the percentage of UTXOs in loss has dropped sharply. A decline of this magnitude carries enough strength to shift the market from a bearish cycle into a bullish one.

Looking at previous market cycles, declines of this scale have represented more than just short-term rebounds. They have shown enough momentum to bring bearish phases to an end and transition the market into a bullish cycle.

In the short term, negative factors such as the recent interest rate hike and the failure of the CLARITY Act to advance may continue to weigh on market sentiment.

However, it seems unlikely that these short-term headwinds alone will completely reverse the on-chain structural changes already taking place and push the market back into a full bear cycle.

The public will only realize later just how important the period we are going through right now truly was.

Written by Crypto Dan