Bitcoin’s bull season continues to offer many twists and turns as expected in a highly volatile market. In line with the rising hopes of many investors, some network metrics suggest that the price gains are far from over. Currently, the top cryptocurrency is trading above $104,400 after a significant price surge last week.
Bitcoin Still Offers Upside Potential – Analyst
In a Quick post On CryptoQuant, an analyst with the username onchained provides an interesting market analysis based on unspent Bitcoin transaction outputs (UTXOs) over the past 2-5 years (2Y-5Y).
For context, UTXO refers to the remaining balance of a cryptocurrency transaction that the recipient has not yet spent. UTXOs are the building blocks of blockchain transactions and can be used to interpret the behavior of their holders, market sentiment, and price cycle dynamics, among other things.
2Y-5Y UTXOs represent Bitcoin held by long-term holders who have not moved their funds during this time. Data from 2Y-5Y UTXOs showed that these holders started recording profits when Bitcoin reached $68,000 in early November.
However, onchained has historically stated that this profit realization signals renewed momentum rather than the end of a bull market. This is because selling pressure is neutralized by equal demand from other participants and in this case from short-term shareholders.
Onchained further explains that this profit taking results in a negative weekly change in the realized price for long-term holders which is vital for a healthy market structure with the potential for further price gains.
Additionally, the MVRV ratio for this UTXO 2Y-5Y combination has consistently reached 1 to indicate any bottom for the overall market in previous bull cycles. MVRV measures the market value of realized value and is used to indicate potential reversals by determining whether an asset is overvalued or undervalued.
Currently, the MVRV ratio is close to 4 which supports the idea that Bitcoin still has plenty of room for price growth in this uptrend.
Coinbase is moving above 100
In other news, the Bitcoin Coinbase Premium Index is now above 100 indicating strong whale activity. However, the cryptocurrency analyst goes by the CryptoQuant username Avocado_onchain male This surge is not large enough to indicate any cumulative fights between the whales.
Avocado_onchain also points out that both a positive and negative Coinbase Premium indicator are needed to indicate a continuation of the Bitcoin trend. At press time, Bitcoin is trading at $103,601 after a 2.44% gain over the past 24 hours. On larger time frames, Bitcoin is making stable gains as evidenced by gains of 10.76% and 2.31|% in the past 37 days respectively.
Featured image from Forbes, chart from Tradingview
The post Bitcoin’s 2-5 Year UTXO Signals Bull Market Continuation first appeared on Investorempires.com.