Bitcoin Market Outlook: UTxO AB RP Points to Potential Re-Accumulation Stage, 35k Level Crucial

By 0xK2 05/22/23 5:40 AM

According to CryptoQuant, recent analysis of the UTxO age bands realized price suggests the possibility of a re-accumulation stage in the cryptocurrency market over the next few months. A key level to watch during this period is 35k, indicating a potential turning point for Bitcoin.

Two noteworthy observations have emerged since 0nchained’s in-depth exploration of these metrics earlier today. Taking a longer-term perspective, this article adopts a technical approach to examine the implications. While previous excitement over the discovery of Puell Multiple manipulation through ordinals spam proved unwarranted, the narrative of “Sell in May” appears to be inaccurate this year.

Anticipation was high for a breakout above 30k even before the market swept through the 30k – 25k range. However, such a surge failed to materialize, leading to speculation that influential market players are currently in a re-accumulation mood.

An important historical pattern to consider is the 18m-2y UTxO age band’s realized price crossing below the 2y-3y UTxO age band’s realized price after the cyclical bottom. This structure has served as a key re-accumulation phase in the past two cycles. Conversely, when the 18m-2y UTxO age band’s realized price crosses back above the 2y-3y UTxO age band’s realized price after the re-accumulation phase, it has presented an opportunity for early profit-taking.

While various indicators such as Realized Price, LTH SOPR structure, MVRV, and Puell Multiple have already confirmed Bitcoin’s cyclical bottom, it is worthwhile to examine the UTxO age bands’ realized prices. Paying particular attention to the 6m-12m UTxO age band crossing below the 12m-18m UTxO age band and referencing 0nchained’s analysis, a potential emerging pattern becomes apparent when zooming out.

Given these findings, it can be assumed that the re-accumulation phase has either commenced or is about to begin soon, countering the initially anticipated “straight up” scenario associated with prolonged market pain. However, caution is advised against becoming excessively bearish solely due to the ongoing debt ceiling kabuki.

Considering the current bull market environment, unless there is a significant event such as a disruption involving Coinbase, the outlook suggests choppiness or further upward movement from the current levels.

Join us on Telegram