Bitcoin Nears This Bullish Crossover, Relief Finally Ahead?
On-chain data shows that Bitcoin is approaching a crossover that has historically proven bullish for the price of the crypto.
Bitcoin short-term and long-term UTXO age bands are approaching crossover
As pointed out by an analyst in a CryptoQuant post, BTC has typically seen a significant increase following the formation of such a crossover.
The relevant indicator here is the “UTXO Age Bands”, which tells us the percentage of Bitcoin supply that each group has right now.
The different age bands indicate the time period that each UTXO (or simply each coin) that falls into the band was last moved.
For example, the 6m-12m UTXO Age Band includes that part of the BTC supply that has not been transferred since six to twelve months ago.
In the context of the subject in question, the age groups of interest are the groups 1m-3m and 2y-3y. The first of these represents the short-term UTXOs (as they have not aged much yet), while the latter denotes the long-term UTXOs.
Now, here’s a chart showing the trend in both of these Bitcoin UTXO age bands over the past few years:
Looks like the two metrics have been approaching each other in recent days | Source: CryptoQuant
As you can see in the graph above, the 1m-3m Bitcoin UTXO Age Band has been declining recently, while the 2y-3y group has seen an increase.
If both indicators continue in their current path, they will soon meet and go through a crossover, where the long-term age band will take over the short-term one.
The quant has also highlighted the trends that followed in the price of BTC when such a pattern previously formed over the past few years.
It seems like every time this type of crossover has taken place for crypto, the price has increased significantly over the long term.
The significance of this cross is that it represents a shift in supply from short-term buyers (who are often weak hands) to long-term holders (strong hands).
It now remains to be seen whether the Bitcoin UTXO Age Bands will continue and complete the cross, and whether the same trend as in history will follow now as well.
BTC price
At the time of writing, Bitcoin’s price is hovering around $16.5k, down 1% in the last week. Over the past month, the crypto has lost 13% in value.
The price of the coin seems to have recovered back above $16.5k during the last 24 hours | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com
