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Bitcoin Consolidation is less than $68,000 It extended throughout this week, with bulls holding above the $66,000 support level. Although the cryptocurrency has not seen a significant push to the upside, its ability to avoid a deeper correction means that Bitcoin is still on the right track To end October on a bullish note.
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In support of these expectations, a cryptocurrency analyst highlighted an emerging trend in Bitcoin’s UTXO metric, which… Indicates an imminent breakout In the price of crypto.
UTXO’s loss reaches the highest point ever
The number of Bitcoin UTXO losses recently reached a new peak on September 11, 2024, surpassing levels last seen during the COVID-19 crash in 2020 and the market bottom in September 2023.
This metric, known as Unspent Transaction Output (UTXO), refers to the amount of Bitcoin that remains unspent in a Bitcoin wallet after a transaction. When UTXO is measured at a loss, it reflects the number of Bitcoin holdings that would currently be sold at a loss compared to the last transaction price of the Bitcoin wallet.
According to Glassnode data, the number of UTXO losses rose significantly in September to exceed previous numbers, indicating that a significant portion of active Bitcoin addresses are underwater. However, while at first glance this may seem like a sign of bearish sentiment, history has done just that Turns out that’s not the case.
As he pointed out According to cryptocurrency analyst CryptoCon, spikes in UTXO losses do not come immediately before terrible price action, but often come at the end of it. Taking this trend into account, a new peak in September will be most likely It was an inflection point Bitcoin price movement for the rest of the year.
What does this mean for the price of Bitcoin?
Past data reveals a consistent pattern: when UTXO losses reach extremely high levels, Bitcoin price is often close to reversing. For example, during the COVID-19 crash in March 2020, UTXO losses rose significantly, followed by a strong rally that sent Bitcoin to all-time highs in the following months.
The last time the UTXO loss spiked significantly was in September 2023, and served as a precursor to the most recent bull market cycle which began in October 2023. This run culminated in a new all-time high for Bitcoin in March 2024, effectively showing the spikes in the UTXO loss as a signal that… Positive market momentum.
If history repeats itself, a September spike in UTXO loss numbers could also signal a market bottom, which in turn opens the way for a rally in the rest of the year.
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Interestingly, Bitcoin price action has been significantly positive since this new peak in UTXO loss. At the time, Bitcoin was trading at around $57,000. Since then, there has been a significant rise in It’s getting closer little by little Price level $70,000.
At the time of writing, Bitcoin is trading at $66,720.
Featured image from Pexels, chart from TradingView
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