The Bitcoin bullish trend keeps unfolding with numerous twists and turns, a hallmark of a highly unpredictable market. Reflecting the increased optimism of various investors, certain network indicators suggest that the upward price movements are far from finished. At present, the original cryptocurrency is trading above $104,400 following a notable price increase over the last week.
Bitcoin Still Offers Growth Potential – Analyst
In a Quicktake article on CryptoQuant, an analyst by the name onchained presents an engaging market examination based on the Bitcoin Unspent Transaction Outputs (UTXOs) from the last two to five years (2Y-5Y).
To clarify, UTXO signifies the unused balance of a cryptocurrency transaction that the recipient has not utilized yet. UTXOs constitute the foundational elements of blockchain transactions and can be utilized to analyze holders’ behavior, market sentiment, and the dynamics of price cycles among other factors.
The 2Y-5Y UTXOs illustrate Bitcoin held by long-term investors who have refrained from transferring their funds during this timeframe. Data regarding the 2Y-5Y UTXOs indicates that these holders began realizing profits when Bitcoin reached $68,000 in early November.
Nevertheless, onchained noted that historically, such profit-taking indicates renewed energy rather than the conclusion of the bullish market. This occurs because the selling pressure is counterbalanced by equal demand from other traders, in this instance, short-term holders.
Onchained further elaborates that this profit realization results in a negative weekly change in the realized price of long-term holders, which is essential for a robust market structure with the possibility of additional price increases.
Moreover, the MVRV ratio for the 2Y-5Y UTXO group has consistently reached 1 to indicate potential macro market bottoms in earlier bullish cycles. The MVRV measures the market value compared to realized value and is employed to suggest potential reversals by assessing if an asset is overvalued or undervalued.
Currently, the MVRV ratio is approaching 4, supporting the idea that Bitcoin still has considerable space for price advancement during this bullish run.
Coinbase Index Rises Above 100
In additional information, the Bitcoin Coinbase Premium Index has now increased above 100, signifying strong activity from whales. However, crypto analyst Avocado_onchain from CryptoQuant mentioned that this rise is not substantial enough to indicate any accumulation disputes among whales.
Avocado_onchain further points out that both positive and negative Coinbase Premium Index readings are necessary to suggest a continuation of Bitcoin’s current trend. At press time, Bitcoin is trading at $103,601 after a 2.44% increase in the last 24 hours. Over larger timeframes, Bitcoin shows stable profit, indicated by gains of 10.76% and 2.31% in the last seven and thirty days respectively.
Featured image from Forbes, chart from Tradingview
