The Bitcoin bull season continues to present several twists and turns as expected of a highly volatile market. In step with the heightened hopes of several investors, certain network metrics indicate the worth gains are removed from over. Currently, the maiden cryptocurrency trades above $104,400 following a major price surge previously week.
Bitcoin Still Presents Upside Potential – Analyst
In a Quicktake post on CryptoQuant, an analyst with username onchained provides an intriguing market evaluation based on the Bitcoin Unspent Transaction Outputs (UTXOs) over the past two to 5 years (2Y-5Y).
For context, UTXO refers back to the remaining balance of a cryptocurrency transaction that has not yet been spent by the recipient. UTXOs are the constructing blocks of blockchain transactions and might be used to interpret holders’ behavior, market sentiment, and price cycle dynamics amongst other things.
The 2Y-5Y UTXOs represent Bitcoin held by long-term holders who haven’t moved their funds during this time. Data from the 2Y-5Y UTXOs showed that these holders began recording profits when Bitcoin hit $68,000 in early November.
Nonetheless, onchained stated historically such profit realization suggests renewed momentum quite than the tip of the bull market. It’s because the selling pressure is neutralized by an equal demand from other participants and on this case short-term holders.
Onchained further explains that this profit-taking produces a negative weekly change within the realized price of long-term holders which is important for a healthy market structure with the potential for further price gains.
As well as, the MVRV ratio for this 2Y-5Y UTXO cohort has consistently reached 1 to signal any macro market bottom in previous bull cycles. The MVRV measures the market value to realized value and is used to point potential reversals by determining if an asset is overvalued or undervalued.
Currently, the MVRV ratio is nearing 4 supporting the notion that Bitcoin still has much room for price growth on this bull run.
Coinbase Index Moves Above 100
In other news, the Bitcoin Coinbase Premium Index has now surged above 100 indicating strong whale activity. Nonetheless, crypto analyst with CryptoQuant username Avocado_onchain stated this surge will not be significant enough to suggest any accumulation battles amongst whales.
Avocado_onchain further states that each positive and negative Coinbase Premium Index are needed to signal a continuation of Bitcoin’s current. At press time, Bitcoin trades at $103,601 after a 2.44% gain previously 24 hours. On larger timeframes, Bitcoin is in stable profit as Indicated by gains of 10.76% and a couple of.31|% previously seven and 30 days respectively.
Featured image from Forbes, chart from Tradingview