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Cryptocurrency News Articles

Bitcoin (BTC) Nears a Local Top as Younger Age Bands Dominate: CryptoQuant

Jan 29, 2025 at 10:00 pm

Since starting a U.S. market-led bull run on the 5th of November 2024, Bitcoin [BTC] has experienced strong upward momentum.

Bitcoin (BTC) Nears a Local Top as Younger Age Bands Dominate: CryptoQuant

Bitcoin [BTC] has experienced a strong upward momentum since starting a U.S. market-led bull run on the 5th of November 2024. Over this period, BTC has reached multiple all-time highs (ATHs) with minor corrections along the way.

With the bull market extending to nearly three months, several analysts have expressed concerns over a potential top.

Among them, CryptoQuant analysts have suggested that Bitcoin is at risk of a local top, citing increased speculation as younger age bands dominate.

Is Bitcoin’s top near? According to CryptoQuant, Bitcoin’s previous cycle peaks have experienced patterns of younger UTXOs (1d-3m) dominating at the tops.

Source: CryptoQuant

Historically, high levels of recently moved coins coincide with cycle tops, notably in 2013, 2017, and 2021.

During the current cycle, the market has seen a surge in younger UTXOs, suggesting growing participation from newer market entrants. However, this cycle has not yet reached the extreme levels seen in previous peaks.

When a large percentage of Bitcoin is held in younger UTXOs, it signals increased speculation and a higher risk of market tops.

Therefore, if this trend continues, we could see a final leg up before distribution begins. However, if long-term holders maintain their positions, Bitcoin’s rally may continue.

BTC was entering a phase of increased market activity, but the proportion of young UTXOs is not yet at historical peak levels.

This indicates that Bitcoin still has room for further upside, though a potential top is not far-fetched.

What BTC’s charts suggest While the rise of younger UTXOs may signal a potential top for Bitcoin, AMBCrypto’s analysis pointed out that the market top is not yet.

Source: CryptoQuant

For instance, Bitcoin’s average dormancy has declined from 116.40 to 17.1. This decline suggests that long-term holders are not selling.

Usually, this means that long-term holders are accumulating BTC, which is often a bullish signal.

Source: CryptoQuant

Bitcoin’s exchange reserve has experienced a sustained drop, falling to 2.3 over the past month. This drop implies that more BTC is being withdrawn from exchanges, suggesting accumulation behavior.

With less selling pressure, BTC is less likely to reach the top.

Source: Santiment

Finally, at press time, Bitcoin’s MVRV stood at 3.03. This level suggests that BTC is currently experiencing healthy market conditions, with rises and minor corrections following. Historically, an MVRV ratio above 3.7 to 4.5 has signaled a potential top.

Is your portfolio green? Check out the Bitcoin Profit Calculator

The current levels suggest that BTC still has room for growth. Although younger UTXOs are rising, Bitcoin has not yet reached the top because long-term holders are maintaining their positions.

At current conditions, BTC could reclaim $105,280. However, a correction at this level could see a drop to $100,000 before starting another uptrend.

Disclaimer:info@kdj.com

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