This short-term Bitcoin holder indicator forecasts another rally for BTC

Bitcoin UTXO age bands’ crossover has forecasted three rallies in the past.
The recent crossover on September 17 suggests another rally in the works for BTC.
A breakdown of the $25,000 support level will invalidate this bullish thesis.

Akash Girimath FXStreet

Bitcoin price currently trades at $26,242 with dampened volatility. But things could change quickly, as indicated by these on-chain metrics that track the behavior of BTC holders.

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Bitcoin price needs to hold this key support

Bitcoin price has been malleable to the short-term holder movements. A large spike in profits for short-term holders is almost always met by a correction in BTC. Likewise, a surge in short-term holders purchasing BTC could trigger an uptrend in the pioneer crypto.

UTXO bands are key to monitoring the sentiment of BTC holders for a specific period. In this case, CryptoQuant’s 1-day to 1-week and 1-week to 1-month UTXO holder bands are used. The range mentioned represents addresses that have not moved their holdings for the specified period.

As seen in the chart below, the 1-day to 1-week UTXO band crossing above the 1-week to 1-month UTXO band has triggered a rally in Bitcoin price. The same has been true since the start of 2023.

The first time this bullish crossover occurred was on January 10, which was just before Bitcoin price rallied from $17,300 to nearly $24,000. Similar crossovers were observed on March 17 and June 21.

Currently, Bitcoin price sits above the critical support level at $25,000 and has also produced a UTXO band bullish crossover, which adds credence to the potentially bullish breakout. If BTC were to trigger a rally here, the target would be $30,000 psychological level.

BTC/USDT 1-day chart

While this optimistic outlook for Bitcoin price is logical and backed by nearly nine months of historical data, investors need to be cautious. A decisive breakdown of the $25,000 support level on the daily time frame will invalidate this bullish thesis for BTC.

In such a case, Bitcoin price could crash 13% to next key support level at $21,637.

Also read: Bitcoin Ordinals creator proposes “Runes”, a replacement for BRC-20 standard

Author

Akash Girimath

FXStreet

Akash Girimath is a Mechanical Engineer interested in the chaos of the financial markets. Trying to make sense of this convoluted yet fascinating space, he switched his engineering job to become a crypto reporter and analyst.