Bitcoin (BTC) Price Might Be Gearing Up for a Fresh Rally — Here's Why
- WBOYOriginal
- 2024-09-08 03:03:09530browse
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.
A crypto analyst has highlighted the appearance of a bullish on-chain signal, indicating the possibility of a fresh rally in Bitcoin’s price.
The analysis, shared by an analyst pseudonymously known as EgyHash in a QuickTake post on CryptoQuant, examines the Bitcoin UTXO (unspent transaction output) metric. This metric tracks the quantity of cryptocurrency that remains after a transaction is executed.
An interesting on-chain insight into the Bitcoin price emerges when considering the percentage of these unspent cryptocurrencies in profit, offering an indication of the market’s current state. For example, a rising percentage of Bitcoin UTXOs in profit suggests that the majority of investors are experiencing gains, which may either encourage them to maintain their faith in the coin or, in some cases,促使 to take profit. Conversely, when a higher proportion of UTXOs are in loss, it indicates that more investors are incurring a loss, suggesting a negative market sentiment.
According to the CryptoQuant analyst, the percentage of Bitcoin UTXOs in profit have been steadily declining, recently reaching 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. Notably, this market phenomenon has coincided with a recent decline in the price of Bitcoin.
The crypto analyst observes that the decline in Bitcoin’s price appears to be linked to profit-taking, with investors selling their coins to realize some gains. This is further supported by the observed decrease in the percentage of Bitcoin UTXOs in profit. However, there may be a silver lining for the premier cryptocurrency, as the UTXO metric has reached its lowest point in several months.
Examining historical data reveals that the proportion of BTC UTXOs in profit at its current level could potentially signal a market bottom. The last time the percentage of Bitcoin UTXOs in profit dropped to 68.5%, the price of Bitcoin surged by 175%, rallying from $26,700 to reach a new all-time high of $73,737. While there is no guarantee of a similar rally from the current point, investors may want to keep an eye on other relevant on-chain metrics.
At the time of writing, the price of Bitcoin is hovering just below the $54,000 level, reflecting a 4.1% decrease in the past 24 hours. According to data from CoinGecko, the flagship cryptocurrency is down by over 9% in the past week.
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