- Bitcoin is not undervalued as on-chain profit and loss indicators predict BTC bottom is approaching.
- Unspent transaction output in profit and loss provides clear BTC buy signals when a cross is generated, the indicator is yet to show a cross in this cycle.
- Experts believe Bitcoin price is on track for a massive trend reversal as exchange stablecoin reserves drop to pre-2021 bull run levels.
Bitcoin is on track to hit a cycle bottom and begin its recovery as stablecoin reserves across exchanges arrive at pre-bull run levels. Experts are closely watching Unsoent Transaction Output (UTXOs) in profit and loss for a cross, a buy signal that times when BTC is undervalued.
Bitcoin is not undervalued yet despite stablecoin reserves hit pre-bull run levels
Bitcoin on-chain indicators currently signal that the asset has reached the undervalued area. However, unlike most cycle indicators like Puell Multiple and SOPR, Unspent Transaction Output Profit and Loss (UTXOs) is key in identifying when Bitcoin is undervalued.
A cross in UTXOs profit and loss generates a buy signal for Bitcoin and affirms that BTC is undervalued. While other on-chain data helps understand the overall BTC phase, it is difficult to ascertain the buying time. When UTXOs in the profit and loss indicators were crossed, BTC price hit a floor, three halvings in a row.
Bitcoin UTXOs in profit and loss
Once a cross is generated in the chart above, Bitcoin could nosedive. Another key indicator of upcoming Bitcoin trend reversal is stablecoin reserves on exchanges.
Stablecoin reserves on exchanges hit pre-bull run levels
Stablecoins like USD Tether (USDT) and USDC play a key role in Bitcoin price rallies. Since stablecoins are the point of entry, conversion of fiat to crypto, the flow of USDT and other stablecoins in the ecosystem has an impact on BTC price. Spot exchange stablecoin reserves have dropped to their pre-2021 bull run levels. At the same time, volatility in stablecoin inflows has hit an all-time high.
Stablecoin reserves on spot exchanges
An increase of stablecoin inflow to the exchange is considered rising demand for assets like Bitcoin. Holders of large volumes of stablecoins increase their transfer to exchanges before a trend reversal and rally in BTC. With rising demand and higher volatility in stablecoin inflows, Bitcoin price is preparing for the next bull run.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Ripple Price Prediction: Whale accumulation sparks hope as rising exchange reserves signal caution
XRP sustains mid-week recovery as XRP/BTC flashes golden cross for the first time since 2017. Large volume holders increase XRP exposure, indicating rising demand and investor confidence.
Pi Network Price Forecast: PI eyes $0.66 as whale activity surges
Pi Network (PI) declines by nearly 4% on Friday, trading at $0.79 at press time. The technical outlook suggests a downward move ahead as the short-term recovery concludes with a trendline breakdown.
Bitcoin Weekly Forecast: BTC enters full price-discovery mode after seven straight weeks of gains
Bitcoin price stabilizes around $111,000 on Friday after reaching a new all-time high of $111,900 this week. Corporate accumulation, institutional demand, signs of easing regulations and fiscal woes in the US have fueled BTC’s rally.
Jupiter Price Forecast: JUP eyes $0.82 as Fluid backs Jupiter's upcoming lending protocol
Jupiter exchanges announced the upcoming launch of Jupiter Lend, powered by Fluid, on Solana this summer. With the announcement of Jupiter Lend, the JUP token surged 16% in the last 24 hours.
Bitcoin: BTC stabilizes near $103,000 amid trade optimism, rising institutional demand
Bitcoin (BTC) price stabilizes at around $103,000 when writing on Friday, after facing multiple rejections at the key $105,000 resistance level throughout the week.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.