According to CryptoQuant, recent analysis of the fair value of UTxO age bands suggests the possibility of an accumulation phase in the cryptocurrency market in the coming months. An important level to monitor during this phase is $35,000, which indicates a potential turning point for Bitcoin.
There are two notable observations since 0nchain explored these data in-depth earlier today. With a longer-term perspective, the article will apply a technical approach to assess the impact. While the previously excited sentiment about detecting manipulation through Puell Multiple Ordinals spam has been proven unfounded, the "sell in May" narrative seems inaccurate this year.
A breakout prediction above $30,000 was elevated even before the market surpassed the $30,000-$25,000 range. However, such a breakout did not materialize, leading to speculation that influential market players are currently looking to accumulate again.
An important historical pattern to consider is the fair value of the 18-month to 2-year UTxO age band sliding below the fair value of the 2-year to 3-year UTxO age band after bottoming in the cycle. This structure reflects a significant accumulation phase in the past two cycles. Conversely, when the fair value of the 18-month to 2-year UTxO age band surpasses the fair value of the 2-year to 3-year age band after the accumulation phase, it presents an opportunity for early profit-taking.
While indicators such as fair value, LTH SOPR, MVRV, and Puell Multiple have confirmed Bitcoin's cycle bottom, it is still necessary to examine the fair value of the UTxO age bands. Paying particular attention to the 6-12 month age band sliding below the 12-18 month age band and referencing 0nchain's analysis, a potential new emerging pattern will become clearer as the chart contracts.
With these findings, it can be assumed that the accumulation phase is beginning or about to begin, going against the "straight up" scenario initially predicted regarding the prolonged market pain. However, caution should be exercised to avoid excessive price declines solely due to the current debt ceiling issues in the United States.
Considering the current bullish environment, unless there are significant events like disruptions related to Coinbase, further upward oscillations or movements are expected from the current levels.
