After the eventful months in the Corona crisis, Bitcoin has recovered very well and has also recently performed a strong rally in the last few weeks. The price managed to break the 10.500 US-Dollar level, where it had been rejected three times in the previous months and continued its movement up to around 12.100 US-Dollars. Many Altcoins were also able to experience a significant upward movement as a result of this rise. Now many new signs are popping up, which show a positive market sentiment in general. Especially some on-chain metrics display, that Bitcoin is performing very well and we possibly could see a bullish progression of the crypto-market in the near future.
Glassnode says 95% of the Bitcoin UTXO’s are in Profit right now
In their weekly on-chain-article the members of Glassnode recently published a remarkable report for all Bitcoin HODLers. According to this report, about 95% of the „Unspent Transaction Outputs“ (UTXO’s) are currently in profit.
A UTXO is generated when someone sends part of their Bitcoin to another wallet address. When done, all of the sender’s Bitcoin are included in the transaction. The surplus part is then sent back to the sending person as a UTXO. To put it simply: This means, that the sum of the unsent transaction outputs is the total number of all unsent BTCs.
According to Glassnode, almost all of these dormant assets are in profit. Currently, according to the UTXO Realized Price Distribution, which shows the allocation of outputs in relation to the price at the time, when they were generated and the current price, the quantities above 10.000 US-Dollars are only marginal in profit, whereas those between 6.000 and 10.000 US-Dollars (which have the largest share) show significant profits.
According to a Twitter commentary, Glassnode wrote, that this indicates a potential bullish movement:
„Extended periods at this level and above are characteristic of bull runs as $BTC moves towards new all-time highs.“
This optimism comes from the fact, that most BTC-owners have already made profits, but are not yet selling, which could potentially lead to a further increase in price.
The data of the last few years show, that if the UTXO profit level remains in the upper percentage range, a large upward movement was also seen in the Bitcoin price every time.
Further positive signs
Another bullish indicator for the Bitcoin network is further on-chain data. According to this, the number of Bitcoin wallet addresses actively used on a daily basis is approximately one million. This volume has not been as high since the beginning of 2018, which indicates increased usage of the network and also provides a good basis for Bitcoins development in general.
Since the price has been above the current level for a relatively short period of time in the past, even someone who started at the previous all-time high of around 20.000 US-Dollars continuously to invest in Bitcoin using the cost-average method, is currently making a profit of over 60%.
The increased trading interest is also reflected in the BTC-futures market. It’s total open interest reached a new all-time high of over 5.57 billion last month, according to Skew. The open interest is the total value of contracts, that have not yet been settled.
Also the „Crypto Fear and Greed Index“, created by alternative.me, which is calculated from data on volatility, volume and the trend in social media, among other things, also currently shows a healthy bullish market sentiment with an average value of 75-80.
Bull market confirmed?
There are many indications, that Bitcoin is facing a bullish phase. However, it should not be forgotten, that external forces can still influence the crypto market. For example, a crash on the stock markets could have a strong impact on the BTC-price. We have seen in the past, that the global financial markets in their general direction correlated not insignificantly with the cryptocurrencies.
It remains to be seen whether we will actually start into a bull run. However, we can see, that the Bitcoin market has primary, regardless of the temporary price development, proven to be very stable and is doing very well right now.