According to BlockBeats, CryptoQuant analyst Axel Adler Jr. shared insights on social media regarding the cryptocurrency market's behavior. He noted that when coin prices experience significant increases, leading to a rapid shift from loss to profit for many tokens, the 30-day simple moving average (SMA) of the Unspent Transaction Output (UTXO) profit-loss ratio tends to rise above 200. This surge in the indicator suggests the market may be nearing an 'overheated' or 'sell-off release' phase.
Currently, the indicator stands at 99, indicating no signs of market overheating. If the SMA consistently surpasses 200, it would signal a new wave of market enthusiasm. While the market could continue reaching new highs, the 'easy fuel' driving the profit-loss ratio upward is largely depleted. Further increases in the indicator would require stronger price momentum or significant volatility.
Adler Jr. emphasized that the third 'compression period' of the current cycle is crucial for pushing the indicator beyond 200 and entering the overheating stage.