Bitcoins consolidation below $68,000 continued throughout the week, with bulls holding above the $66,000 support level. While the cryptocurrency has not seen significant upward momentum, its ability to avoid a deeper correction means that Bitcoin remains on track end October with growth.

In support of this perspective, the cryptocurrency analyst highlighted an emerging trend in Bitcoin’s UTXO metric, which suggests an imminent breakout at the price of cryptocurrency.

UTXO loss reached the highest level in history

Bitcoin UTXO losses recently reached a recent high on September 11, 2024, surpassing levels last seen during the 2020 Covid-19 crash and the market low in September 2023.

This metric, known as unspent transaction output (UTXO), refers to the amount of Bitcoin that remains unspent in your Bitcoin wallet after a transaction. When UTXO is measured at a loss, it reflects the number of Bitcoins you hold that would currently sell at a loss compared to the last trading price from your Bitcoin wallet.

According to Glassnode data, the number of UTXO losses increased sharply in September, exceeding previous numbers, indicating that a significant portion of lively Bitcoin addresses are underwater. While at first glance this may seem like a sign of bearish sentiment, history has done just that showed that this is not the case.

As indicated According to cryptocurrency analyst CryptoCon, UTXO’s major loss spikes do not appear right before the terrible price action, but mostly appear at the end of it. With this trend in mind, a recent peak is likely in September was a turning point for Bitcoin’s price action for the rest of the year.

What does this mean for the price of Bitcoin?

Past data reveals a consistent pattern: when UTXO loss reaches extremely high levels, Bitcoin’s price often comes close to reversing. For example, during the Covid-19 crash in March 2020, UTXO’s loss increased significantly, followed by a mighty rally that drove Bitcoin to recent record highs in the following months.

The last time UTXO’s loss spiked was in September 2023, which was a harbinger of the latest bull market cycle that began in October 2023. This rally culminated in Bitcoin’s recent all-time high in March 2024, effectively showing spikes in UTXO’s losses as a signal of positivity market dynamics.

If history were to repeat itself, September’s spike in UTXO losses could also signal a market bottom, which in turn sets the stage for gains throughout the rest of the year.

Interestingly, Bitcoin’s price action has been particularly positive since the recent peak in losses in UTXO. At that time, the price of Bitcoin was around $57,000. Since then there has been significant growth, approaching Price level $70,000.

At the time of writing, Bitcoin is trading at $66,720.

Featured image from Pexels, chart from TradingView