Bitcoin’s bull season continues to feature several twists and turns, as expected in a highly volatile market. In line with the increased hopes of several investors, some network indicators indicate that the price boost is not over yet. The first cryptocurrency is currently trading above $104,400 after a significant price boost last week.
Bitcoin still has growth potential – analyst
In Quick post on CryptoQuant, an analyst with the username onchained presents an intriguing market analysis based on unspent Bitcoin (UTXO) transaction results over the last two to five years (2-5 years).
In the context of UTXO, it refers to the remaining balance of a cryptocurrency transaction that has not yet been spent by the recipient. UTXOs are the building blocks of blockchain transactions and can be used to, among other things, interpret holder behavior, market sentiment, and price cycle dynamics.
2-5 year UTXOs represent Bitcoin held by long-term holders who have not transferred their funds during that time. Data from 2-5 year UTXOs showed that these holders began to see profits when Bitcoin reached $68,000 in early November.
However, onchained said that historically, such profit-taking suggests renewed momentum, not the end of a bull market. This happens because the selling pressure is neutralized by equal demand from other participants, in this case short-term holders.
Onchained further explains that profit-taking results in a negative weekly realized price change for long-term holders, which is crucial for a robust market structure with the potential for further price increases.
Additionally, the MVRV for this 2-5 year UTXO cohort has consistently been at 1, which signals any macro market bottom in previous bull cycles. MVRV measures market value relative to realized value and is used to indicate potential reversals by determining whether an asset is overvalued or undervalued.
Currently, the MVRV ratio is approaching 4, which supports the view that Bitcoin still has plenty of room to boost prices in this bull market.
Coinbase Index Moves Above 100
In other news, the Bitcoin Coinbase Premium Index has now risen above 100, indicating mighty whale activity. However, a crypto analyst with the CryptoQuant username Avocado_onchain he stated this boost is not significant enough to suggest any accumulation battles between whales.
Avocado_onchain further states that both a positive and negative Coinbase Premium Index are needed to signal a continuation of the Bitcoin trend. At press time, Bitcoin is trading at $103,601 after rising 2.44% in the last 24 hours. On larger time frames, Bitcoin has been showing stable gains, as indicated by gains of 10.76% and 2.31|% over the last seven and 30 days, respectively.
Featured image from Forbes, chart from Tradingview
