Bitcoin’s UTXO Data Hints at Continued Bull Market Surge!

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The Bitcoin market is showing typical turbulence, given its notorious volatility, with unexpected ups and downs along the way. As optimism among investors swells, some network indicators suggest that the price increases might still be in their early stages. At present, this pioneering digital currency is trading above $104,400, having experienced a substantial rise over the past week.

Bitcoin Still Presents Upside Potential – Analyst 

In a recent post on CryptoQuant, a user named “onchained” offers a fascinating examination of the Bitcoin market using data from Unspent Transaction Outputs (UTXOs) spanning the last 2 to 5 years.

In simpler terms, UTXO stands for Unspent Transaction Output. It represents any cryptocurrency that was sent in a transaction but hasn’t been utilized by the recipient yet. UTXOs serve as the foundation for blockchain transactions and can help us understand the actions of investors, market trends, and even price fluctuations among other aspects.

2Y-5Y UTXO coins are those owned by long-term investors who haven’t transferred their Bitcoins for the last 2 to 5 years. Data derived from these coins indicates that these investors began realizing profits as Bitcoin reached approximately $68,000 in early November.

Conversely, historically speaking, such profit realizations have indicated a resurgence of momentum instead of the conclusion of the bull market. This is due to the fact that the increased selling pressure is offset by equivalent demand from other market participants, including short-term holders in this scenario.

In simpler terms, Onchained clarifies that cashing out leads to a decrease in the average purchase price for long-term investors over a week, which is essential for maintaining a robust market setup and potentially triggering more price increases.

Furthermore, during past bull runs, the MVRM (Market Value to Realized Value) ratio for this 2-5 year UTXO group has repeatedly hit 1 as a sign of any macro market bottom. This ratio serves to identify if an asset is overvalued or undervalued by comparing its current market value to its realized value, and can help predict possible price reversals.

At present, the MVRM ratio is approaching 4, suggesting that Bitcoin may have significant potential for further price increase during this bull market phase.

Coinbase Index Moves Above 100

Meanwhile, it’s worth noting that the Bitcoin Coinbase Premium Index has climbed over 100, which typically signals high-volume transactions by large investors known as “whales.” Yet, a crypto analyst going by the username Avocado_onchain on CryptoQuant finds this increase insufficient to indicate any intense accumulation disputes among these whales.

According to Avocado_onchain, it’s essential to observe both rising and falling Coinbase Premium Index values to predict that Bitcoin’s current trend will persist. At this moment, Bitcoin is trading at approximately $103,601, having increased by 2.44% over the past day. Over longer periods, Bitcoin has been making steady profits, with gains of 10.76% and 2.31% in the last seven and thirty days respectively.

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2025-01-18 17:42