Bitcoin has reached a major milestone by surpassing the $90,000 price mark, marking a significant moment in its ongoing bullish rally. The price surge has drawn the attention of existing investors and attracted a new wave of market participants.
This influx is evidenced by the increase in UTXO (Unspent Transaction Output) Age Bands. This metric tracks the distribution of Bitcoin holdings by age, according to an analysis shared by CryptoQuant analyst Shiven Moodley. This development reflects heightened interest and engagement in the Bitcoin market.
Moodley’s analysis revealed that a high percentage of market participants are currently profitable, as indicated by the UTXO profit percentage metric.
However, despite this strong market performance, long-term holders appear to maintain their positions even as the derivatives market becomes increasingly leveraged.
Profitability Metrics Signal Market Momentum
One of the key insights highlighted by Moodley is the positive Spent Output Profit Ratio (SOPR). This indicator suggests that many Bitcoin transactions are occurring at a profit, reflecting an optimistic market sentiment and providing a foundation for potential further price increases.
However, Moodley pointed to a developing “mania phase” in the market, evidenced by the growing number of options market call contracts set to expire over the next two months.
This surge in call contracts indicates that many traders are betting on continued upward momentum, potentially driving further speculative activity.
The CryptoQuant analyst also discussed the implications of probability models that track Bitcoin’s price movements over time. According to these models, with a lag of 500 days, Bitcoin has breached two standard deviations at the $90,000 level.
The next significant price marker, represented by the third standard deviation, according to Moodley is currently projected to be around $101,000. This suggests that, while Bitcoin’s current upward trajectory is notable, the potential for further price gains remains.
Bitcoin Market Performance
Bitcoin appears to be now seeing a cool off in its recent bullish momentum. Particularly, following a consistent week of new highs reaching a peak of $93,477 yesterday, BTC has since faced a major pullback in price, bringing its price to trade as low as below $89,000, as of today.
At the time of writing, the asset currently trades for $88,878, down by 2.9% in the past day. Regardless, BTC seems to still be in an uptrend with a past week performance of nearly 20%.
Notably, while the market environment still reflects strong bullish sentiment, there are risks to be aware of. As highlighted by Moodley, the increased leverage in the derivatives market, combined with rising call options activity, could lead to heightened volatility in the BTC market.
Overleveraged markets are historically prone to corrections, especially when market sentiment shifts rapidly. Therefore, while many market participants may currently be in profit, maintaining caution is worth considering.
Featured image created with DALL-E, Chart from TradingView
