Bitcoin Onchain Analysis UTXO Is Reaching 95% Profit

In this article, Bitcoin Magazine will take a look at Bitcoin’s on-chain metric, specifically unspent Transaction Output (UTXO). Current numbers differ from those of the 2017 market cycle high, suggesting that the current rally is likely not a rally, but rather a continuation of the uptrend.

The UTXO model of cryptocurrencies is very different from other currency systems. Each input uses existing UTXOs, which are then generated via an output.

For example, an address has two UTXOs with values ​​of 0.8 and 0.5 BTC. When it does a 1 BTC transfer, both UTXOs are destroyed and another one with a value of 0.3 BTC is created.

Thus, existing UTXOs are used in a transaction while new UTXOs are created based on the rest. The price at the time of the UTXO is recorded so that when the price hits the all time high it is 100% clear that all UTXOs are profitable. This rate is currently 95.31%.

An interesting way of looking at the indicator is to measure the time period over which 95% of UTXOs were profitable (red line).

During the 2016 BTC bull run, the indicator stayed above this level for about a year, with three sharp declines below it. During this current bull run, it stayed above the 95% mark for six months before collapsing in April.

The indicator is now above 95% again (blue circle). During the 2016 bull run, the recovery was weak and the indicator failed to hit the 95% line. The same thing happened at the Bull Run 2013 (black circle).

Technically, this shows that the ricochets after the BTC crash of 2013 and 2016 were much weaker than the current one. This means that instead of experiencing a rally, Bitcoin continues its upward trend.

The source: Glass knot

Point of difference

If you compare the decline in 2017 with the most recent retracement, you immediately notice the sharpness of the former compared to the latter.

The profitable UTXO percentage fell to 80% in just two months after first falling below 95% (black circle).

Then after four months it fell to 75% (blue circle) and after six months to below 70% (red circle).

The downward movement culminated in February 2019 with a low of 45.96%.

The source: Glass knot

This movement was gradual in 2021. The profitable UTXO percentage hit a local low of 84.49% in July 2021, much higher than in 2017.

This indicator has reversed its trend and is now back above 95%. This move is not the same as the tip of the previous cycle.

Thus, in contrast to 2017, the profitable UTXO percentage has never fallen below 80% and is now above 95% again.

The source: Glass knot

Join Bitcoin Magazine Telegram to keep track of news and comment on this article: https://t.me/coincunews

SN_Nour

According to Beincrypto

Follow the Youtube Channel | Subscribe to telegram channel | Follow the Facebook page