Bitcoin is showing “characteristic” signs of starting a bull run as less than 3% of unspent transaction outputs remain not in profit.
In the latest edition of its weekly newsletter, The Week On-Chain, monitoring resource Glassnode highlighted a raft of fresh data supporting the bull case for Bitcoin.
Glassnode: UTXOs suggest move to new all-time highs
“The percentage of bitcoin UTXOs in a state of profit has surpassed 97% as BTC’s price continues to increase,” it summarized, referring to unspent transaction outputs, or the portion of funds from a Bitcoin transaction which remain unspent.
“Historically, when the percentage of UTXOs in profit crosses the 95% threshold, BTC sees significant gains over a short period of time—usually around two to three months, although sometimes shorter.”
At present, 97% of UTXOs are worth more than when they were created, and the number is only increasing. Put differently, less than 3% of UTXOs were created at a higher price than the current spot price of around $12,200.
As Glassnode notes, once BTC/USD reaches new all-time highs, the proportion of UTXOs in profit will be 100%.
“Extended periods at this level and above are characteristic of bull runs as BTC moves toward new all-time highs (at which point the metric reaches 100%),” the newsletter added.
BTC tipped to “regain dominance” from altcoins
Should bullish momentum continue, the picture is also bright for Bitcoin’s share of the overall cryptocurrency market.
Recent weeks have seen speculation that altcoins will continue to deliver better returns, Modern Consensus noting that their advance has chipped away at Bitcoin’s market cap share.
Conspicuous plugs from figures popular with mainstream consumers, specifically David Portnoy this week, have compounded altcoins’ heightened public profile.
For Glassnode, however, Bitcoin can easily reverse the status quo in future.
“With the growing interest in altcoins and general bullish sentiment within the cryptocurrency space, BTC may soon follow this trend to regain dominance in the market,” it said.
Other metrics also flashed positive, with Glassnode’s Compass price charting tool remaining firmly in the green.
The newsletter concluded about this week’s environment:
“The compass’ continued position in the upper right quadrant provides an optimistic signal of continued bullish sentiment and on-chain activity. This trend supports the widely circulating speculation that BTC is indeed in the early phases of entering a bull market.”
“Picture perfect advance”
Other analysts are also firmly bullish on both short-term and long-term timeframes. Among them is John Bollinger, creator of the Bollinger Bands volatility forecasting tool.
Tweeting on Monday as BTC/USD reclaimed $12,000, Bollinger said that the current rally was “picture perfect.”
Bollinger Bands have previously proven to be a useful warning of impending major moves in Bitcoin, functioning as required from the pit of the bear market in late 2018 through last year’s resurgence to $13,800.
Bollinger himself, however, is rarely as optimistic as now.
“I imagine that someone is complaining about the $BTCUSD rally. Not me, a picture perfect advance so far,” he wrote.
“Squeeze, confirmed break out, walk up the upper band, consol[idate], support at middle band, mini-Squeeze, break to new highs. How much more could one ask for?!”