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Bit of a misnomer than, if I bought BTC at 20k, then send it to myself in a different wallet when the price is 100k. No additional purchase occurred, but a new UTXO is created at that increased price. Then if price drops to 80k, one UTXO is at a profit and one at a loss, instead of both at a profit.
Either way it's still probably the only way to look and get an estimate.
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Yes, definitely — it is an aggregated estimation. It's not an exact number, but as the number of transactions grows, these movements that aren't real buys and sells matter less and less.
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Price at the UTXO creation date.