The on-chain data shows that Bitcoin holders have recently made another rapid accumulation, which may lead to the formation of a bottom for the cycle.
Bitcoin 1w-1m realized Cap UTXO age bands rose sharply
As one analyst pointed out in a post on CryptoQuant, the percentage of the cap achieved by BTC that was last moved 1 week to 1 month ago has shown a rapid upward trend for the first time in this bear.
The “realized cap” is a Bitcoin capitalization model that values each coin in circulating supply using the price at which it was last moved. The metric then calculates the “true valuation” of BTC by adding all these values of the individual coins together.
This is different from normal market capitalization, where every coin in circulation has the same value; the current Bitcoin price.
The “Realized Cap – UTXO Age Bands” is an indicator that tells us the distribution of the realized cap of each age band in the market.
These age brackets specify the ranges between which UTXOs (or more simply, coins) falling into said age bracket were last moved.
The relevant age range here is the 1w-1m group, which includes all UTXOs that were last moved 1 week to 1 month ago.
Here is a graph that shows how the percentage of the realized cap contributed by this age group has changed over the years:
Looks like the value of the metric has sharply gone up in recent weeks | Source: CryptoQuant
As you can see in the chart above, the realized cap of the Bitcoin UTXO 1w-1m age band has been trending rapidly upwards recently.
The older end of this range, i.e. a month ago, is around when the crash due to the collapse of FTX took place.
The rise in the indicator’s value therefore suggests that investors have made further accumulation on the lows following this crash.
This is the first time in this Bitcoin bear market that such a rapid new accumulation has taken place.
From the chart, it is evident that these rises have historically coincided with cyclical lows in the price. Another interesting thing to note is that between these peaks of the metric in the previous two cycles, there were 1358 days.
The current rise occurred 1444 days after the last one, which is of a similar duration to the previous gap. If there really is a pattern here, then the Bitcoin bottom may be very close, if not already.
As of this writing, the price of Bitcoin is hovering around $16.8,000, down 1% in the past week.
BTC plunges down | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com