Bitcoin has been experiencing significant price gains lately, hitting its highest value since June 2022 and breaking through the $28,000 level. However, experts warn that the cryptocurrency is likely to face significant resistance at the $29,000-$30,000 level, and may undergo a number of price corrections before it can surpass this barrier.
According to data compiled by CryptoQuant, the observed Unspent Transaction Output (UTXO) index for the 2-3 year age range suggests that the realized price for this category is $29,700. The UTXO ratio for this age range constitutes 12.64% of the total UTXOs, which indicates that a significant amount of bitcoin held by long-term investors may soon be sold off.
This sell-off may be driven by the fact that the realized price for the 2-3 year age range is higher than that of the 6-12 month index, which is $28,200. Whenever there has been a crossover between these two indexes in the past, it has typically resulted in a price correction.
It is important to note that while the UTXO index can provide valuable insights into the behavior of long-term bitcoin holders, it is just one of many factors that can impact the cryptocurrency’s price. Other variables, such as market sentiment, regulatory developments, and adoption rates, can also play a significant role.
Nevertheless, the UTXO data does suggest that bitcoin may face some short-term volatility as long-term holders potentially take profits. It remains to be seen whether the cryptocurrency will be able to break through the $29,000-$30,000 resistance level in the near future, but the data indicates that it may face significant headwinds in doing so.
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This article was republished from azcoinnews.com
