Sep 08, 2024 12:05
A crypto analyst has revealed that the price of Bitcoin might be gearing for a fresh rally after the appearance of a bullish on-chain signal. Bitcoin UTXOs In Profit At Lowest Level Since 2023 Heres Why In a QuickTake post on the CryptoQuant platform, an analyst with the pseudonym EgyHash shared an interesting on-chain insight into the Bitcoin price. This on-chain observation revolves around the Bitcoin UTXO (unspent transaction output) metric, which tracks the amount of cryptocurrency that remains following the execution of a transaction. Related Reading: Heres How Cardano Price Will Survive A US Recession: Crypto Analyst The percentage of these unspent cryptocurrencies in profit gives an insight into the market’s current condition. For instance, an increase in Bitcoin UTXOs in profit suggests that most investors are in the green, which can either motivate them to keep faith in the coin or, in some scenarios, push them to take profit. On the other hand, when a higher percentage of UTXOs are in loss, it means that more investors are holding a loss, suggesting a negative market sentiment. According to the CryptoQuant analyst, the percentage of Bitcoin UTXOs in profit has steadily declined, recently falling to its lowest level since October 2023. Data from CryptoQuant shows that the proportion of Bitcoin UTXOs in profit decreased from 99% in June 2024 to 68.5% in September 2024. Interestingly, this market phenomenon has coincided with a recent fall in the price of Bitcoin. The crypto analyst noted that the decline in Bitcoins price seems to be associated with profit-taking, as investors are selling their coins to realize some gain. Meanwhile, this is supported by the aforementioned decline in the percentage of Bitcoin UTXOs in profit. Nevertheless, it may not be all bad news for the premier cryptocurrency with the UTXO metric currently at a multi-month low. Historical data shows that the proportion of BTC UTXOs in profit being at its current level could be a signal of a market bottom. The last time the Bitcoin UTXOs in profit slumped to 68.5%, the price of Bitcoin rallied 175% from $26,700 to a new all-time high of $73,737. While there is no guarantee there will be a repeat rally from the current point, investors might still want to pay attention to other relevant on-chain metrics. BTC Price At A Glance As of this writing, the price of Bitcoin is slightly under the $54,000 level, reflecting a 4.1% decline in the past 24 hours. According to data from CoinGecko, the flagship cryptocurrency is down by more than 9% in the past week. Related Reading: Solana To $100 Inevitable After This Break? SOL Forms A Triple Bottom Featured image from iStock, chart from TradingView
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