Bitcoin UTXO in Loss Reaches All-Time High, Signaling Potential Price Rally
Bitcoin’s consolidation below $68,000 continues this week, with support above the $66,000 level. While there has been no significant upward movement, Bitcoin's stability suggests it may conclude October positively.
A crypto analyst indicates a trend in Bitcoin’s UTXO metric that points to a potential breakout.
UTXO In Loss Reaches Highest Point Ever
The number of Bitcoin UTXO in losses peaked on September 11, 2024, surpassing levels from the COVID-19 crash in 2020 and the market bottom in September 2023.
Unspent Transaction Output (UTXO) refers to Bitcoin that remains unspent after transactions. UTXO in loss indicates holdings that would sell at a loss based on the last transaction price.
Data from Glassnode shows a significant spike in UTXO in losses in September, indicating many active Bitcoin addresses are underwater. Although this might suggest bearish sentiment, historical data suggests otherwise.
Crypto analyst CryptoCon notes that major spikes in UTXO loss typically occur at the end of price declines, not before them. Thus, the September peak likely marks an inflection point for Bitcoin’s price action for the remainder of the year.
What Does This Mean For Bitcoin Price?
Historical patterns indicate that extreme highs in UTXO in loss often precede price reversals. For example, during the March 2020 COVID-19 crash, a spike in UTXO in loss led to a strong rally and new all-time highs shortly thereafter.
The previous UTXO in loss spike occurred in September 2023, which preceded the latest bull market cycle starting in October 2023, culminating in a new all-time high for Bitcoin in March 2024. This pattern reinforces the notion that spikes in UTXO in loss can signal positive market momentum.
If historical trends hold, the recent spike in UTXO loss could indicate a market bottom, paving the way for a rally for the rest of the year.
Since the peak in UTXO in loss, Bitcoin’s price has shown positive movement, rising from around $57,000 towards the $70,000 level. Currently, Bitcoin is trading at $66,720.
Featured image from Pexels, chart from TradingView