On-chain data shows that Bitcoin is approaching a crossover that has historically proven bullish for the price of the crypto.
Short-term and long-term Bitcoin UTXO age groups are approaching crossover
As noted by an analyst in a CryptoQuant afterBTC has usually seen a significant increase after the formation of such a crossover.
The relevant indicator here is the “UTXO age groups”, which tells us the percentage of the Bitcoin supply that each group currently holds.
The different age groups indicate the time period between which each UTXO (or simply each coin) that fell in the said band was last moved.
For example, the 6m-12m UTXO Age Band includes the portion of the BTC supply that was not transferred six to 12 months ago.
In the context of the current topic, the age groups of interest are the groups 1m-3m and 2y-3y. The former represents the short-term UTXOs (since they have not aged much), while the latter indicates the long-term UTXOs.
Now, here is a chart showing the trend in both 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 chart above, the 1m-3m Bitcoin UTXO Age Band has been falling lately, while the 2y-3y group is seeing an increase.
If both indicators continue on the current trajectory, they will soon meet and crossover, with the long-term age group catching up with the short-term.
The quant has also pointed to the trends that followed in the price of BTC when such a pattern formed earlier in recent years.
It seems that when this kind of crossover has happened for the crypto, the price has increased significantly in the long run.
The significance of this intersection is that it represents a shift in supply from short-term buyers (who are often weak-handed) to the 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 now also follow.
BTC price
At the moment of writing, The price of Bitcoin floating around $16.5k, down 1% over the past 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