As a seasoned researcher with over a decade of experience in the volatile world of cryptocurrencies, I find myself intrigued by this latest analysis from EgyHash on CryptoQuant. The decline in Bitcoin UTXOs in profit to its lowest level since October 2023 might just be the bullish on-chain signal we’ve been waiting for.
A cryptocurrency expert predicts that the cost of Bitcoin could potentially surge again following the emergence of a positive network activity pattern.
Bitcoin UTXOs In Profit At Lowest Level Since 2023 — Here’s Why
On CryptoQuant’s QuickTake post, an analyst known as EgyHash provided an intriguing look at Bitcoin price trends based on on-chain data. Specifically, this analysis focuses on the Bitcoin UTXO (unspent transaction output) measure, which monitors the leftover cryptocurrency following a transaction execution.
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.
Based on findings by a CryptoQuant analyst, it’s been observed that the percentage of Bitcoin wallets holding profits (UTXOs) has been gradually decreasing and recently reached its lowest point since October 2023. Data from CryptoQuant indicates that this percentage dropped from approximately 99% in June 2024 to about 68.5% in September 2024. Notably, this downward trend in the proportion of profitable UTXOs has occurred alongside a recent drop in Bitcoin’s price.
The crypto expert observed that Bitcoin’s falling price might be due to investors cashing out their Bitcoins to secure profits, as suggested by the decrease in the percentage of Bitcoin transactions that are profitable. However, this situation could also indicate positive news for Bitcoin since the UTXO metric (Unspent Transaction Output) is currently at its lowest level in several months.
Historical trends indicate that when the percentage of Bitcoin transactions output (UTXOs) in profit reaches its current level, it could potentially signal a market bottom. In fact, when UTXOs in profit dipped to 68.5% previously, Bitcoin’s price surged by approximately 175%, rising from $26,700 to an all-time high of $73,737. It’s important to note that while a similar rally may not necessarily occur now, it might be wise for investors to monitor other significant on-chain indicators.
BTC Price At A Glance
Currently, Bitcoin’s price hovers slightly below $54,000, representing a 4.1% drop over the last day. Looking at data from CoinGecko, it shows that Bitcoin has experienced a decrease of over 9% in value within the last seven days.
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2024-09-07 19:34