Bitcoin Unspent Transaction Output May Be Linked To Future Price Growth


Bitcoin Unspent Transaction Output May Be Linked To Future Price Growth

Bitcoin has experienced a very hard year. It has lost more than 65% of its price since its all-time high and its value may continue to plunge. Nevertheless, there is still hope for a bull run in some months, at least this is what some analysts say.

According to the Twitter user FlibFlib, there is an important number of investors that are buying and purchasing Bitcoin (BTC) at all times, even when the market is falling. This shows that there is still interest in Bitcoin and that accumulation continues to grow.

In order to reach such a conclusion, the user analyzed Unspent Transaction Output (UTXO) and Bitcoin price in the last years. When there is an increase in UTXO, he associates it with accumulation. If there is a decrease in UTXO, this could be related to distribution.

In the chart published by this analyst a few days ago, it is possible to see that the UTXO has been growing between August and November 2018. This is something similar to what happened during 2016 and 2017. For FlibFlib we currently are in a Re-accumulation phase.

During the last bull run, UTXOs continued to rise drastically even after Bitcoin reaching $20,000 dollars back in December 2017. After it, the indicator experienced a pronounced decline, which was completely correlated to the price movement of Bitcoin. A few weeks after reaching $20,000, Bitcoin was already traded under $10,000 dollars. Some months later, Bitcoin was traded under $6,000 dollars.

As mentioned before, since July, UTXOs have performed in a negative correlation with Bitcoin. While Bitcoin remained stable or even lower, UXTOs continued to grow. This could mean that accumulation started again and that the market is getting prepared for a new bull run in the future.

In order to see a real bull run market starting, the graphic should behave in a positive way both for UTXOs and Bitcoin’s price. If Bitcoin starts to grow in terms of value and the number of users holding BTC also increases, it could mark the end of the year-long bear market.

At the time of writing, Bitcoin is being traded under $5,500 dollars, the lowest price in more than a year. In the last 24 hours, Bitcoin has lost more than 12% of its value and it has a market capitalization of $95 billion dollars.

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