I'm working on the UTXO database for my Python implementation of bitcoind and have found a situation I did not realize was valid, but since it seems to be, had a quick question.

If you look at block #546 the 4th transaction's first input uses its own block's 3rd transaction as an input.

My question is, would the other way be valid, that is, could the 3rd transaction of a block, use the 4th transaction from the same block as an input? Or are transactions processed strictly top to bottom?

Thanks,

RicMoo

P.S. If it is valid, another question; what would happen if a transaction was self-referencing? I realize it would be very difficult to find one, but if I could find a transaction X whose input was X and had an output Y, would Y be a new valid utxo, without being a generation transaction input?