Bitcoin has been hanging around the $66,000 mark for a while now, and while it hasn’t seen any major price jumps, it’s also avoided a big drop. This suggests Bitcoin is on track for a good October.
One analyst has pointed to a trend in Bitcoin’s UTXO metric, which could indicate a big price surge is coming.
What’s UTXO and Why Is It Important?
UTXO stands for Unspent Transaction Output. Basically, it’s the amount of Bitcoin that’s left in a wallet after a transaction. When we talk about UTXO in loss, it means the Bitcoin in that wallet would be sold at a loss compared to the last time it was used.
Recently, the number of UTXO in loss hit a new record high, even surpassing the levels seen during the 2020 COVID crash and the market slump in September 2023. This means a lot of Bitcoin addresses are currently underwater.
Does This Mean Bitcoin Is Doomed?
At first glance, it might seem like bad news, but history suggests otherwise.
The analyst CryptoCon has noticed that major spikes in UTXO loss usually happen at the end of a price slump, not right before one. So, this recent spike could actually be a sign that Bitcoin is about to turn things around.
Bitcoin’s Price History Shows a Pattern
Looking back, we see a consistent pattern: when UTXO in loss reaches extreme highs, Bitcoin’s price often rebounds.
- During the COVID crash in 2020, UTXO in loss spiked, followed by a strong rally that took Bitcoin to new all-time highs.
- The same thing happened in September 2023, which marked the start of the latest bull market cycle.
So, if history repeats itself, this recent spike in UTXO in loss could be a sign that Bitcoin is about to hit a bottom and start a new rally.
Bitcoin’s Price Has Already Started to Recover
Interestingly, Bitcoin’s price has been doing pretty well since this new peak in UTXO in loss. Back then, Bitcoin was trading around $57,000, and it’s now closer to $70,000.
While it’s still early to say for sure, this recent trend in UTXO in loss, combined with Bitcoin’s recent price action, could be a good sign for the future of Bitcoin.
