Bitcoin UTXO Surpasses COVID 2020 Levels To New ATH – Is This Good Or Bad For Price?
27 Oktober 2024 - 6:30AM
NEWSBTC
Bitcoin’s consolidation below $68,000 extended throughout this
week, with bulls holding steady above the $66,000 support level.
Although the cryptocurrency hasn’t seen a significant push to the
upside, its ability to avoid a deeper correction means that Bitcoin
remains on track to end October on a bullish note. Related Reading:
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support of this outlook, a crypto analyst has highlighted an
emerging trend in Bitcoin’s UTXO metric, which suggests a looming
breakout in the crypto’s price. UTXO In Loss Reaches Highest Point
Ever The number of Bitcoin UTXO in losses recently reached a new
peak on September 11, 2024, surpassing levels last seen during the
COVID-19 crash in 2020 and the September 2023 market bottom.
This metric, known as Unspent Transaction Output (UTXO), refers to
the amount of Bitcoin that remains unspent in a Bitcoin wallet
after a transaction. When UTXO is measured in loss, it reflects the
number of Bitcoin holdings that would currently sell at a loss
compared to the last transaction price from the Bitcoin wallet.
According to Glassnode data, the number of UTXO in losses spiked
massively in September to surpass previous numbers, indicating that
a significant portion of active Bitcoin addresses are underwater.
However, while this may appear to signal bearish sentiment at first
glance, history has shown this isn’t the case. As pointed out by
crypto analyst CryptoCon, major spikes in UTXO loss don’t come
right before terrible price action, but they mostly come at the end
of it. Keeping this trend in mind, the new peak in September most
likely was an inflection point for Bitcoin’s price action for the
rest of the year. What Does This Mean For Bitcoin Price? Past data
reveals a consistent pattern: when UTXO in loss reaches extreme
highs, Bitcoin’s price is often near a reversal. For instance,
during the COVID-19 crash in March 2020, UTXO in loss spiked
significantly, followed by a strong rally that led Bitcoin to new
all-time highs in the following months. The last time the
UTXO in loss spiked massively was in September 2023, serving as the
forerunner for the latest bull market cycle which kicked off in
October 2023. This run culminated in a new all-time high for
Bitcoin in March 2024, effectively showcasing spikes in the UTXO in
loss as a signal of positive market momentum. If history were to
repeat itself, the September spike in the UTXO loss numbers could
also signal a market bottom, which in turn opens up the stage for a
rally in the rest of the year. Related Reading: Shiba Inu Inflows
Soar 555% In 3 Months – Will The Momentum Continue? Interestingly,
Bitcoin’s price action has been notably positive since this new
peak in UTXO in loss. At the time, Bitcoin was trading around
$57,000. Since then, it has experienced a considerable rally,
inching closer to the $70,000 price level. At the time of writing,
Bitcoin is trading at $66,720. Featured image from Pexels, chart
from TradingView
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