Bitcoin’s recent price movement has caught the attention of analysts, with many tracking its potential peaks using the UTXO Profit/Loss (P/L) Ratio Model. This model has gained importance as it highlights trends in profitability and loss ratios, often signaling critical price cycles and potential reversals.
By examining moving averages over different timeframes — including short (7-day), medium (30-day), and long-term (365-day) — analysts gain insight into Bitcoin’s market health.
Notably, historical data marked by white squares on the chart indicate trends similar to today’s, suggesting Bitcoin could be nearing a new peak soon.
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The UTXO P/L Ratio provides a snapshot of the balance between profitable and unprofitable Bitcoin holders, often hinting at possible price reversals. When the 30-day P/L ratio moves above the 365-day moving average, the data suggests a potential price surge.
In recent cycles, the 30-day average’s increase above the annual average has corresponded with price rallies.
This trend, coupled with a decline in profitability ratios, has emphasized the significance of short- and medium-term trading strategies, pointing to the possibility of a new high if the annual profit average continues to act as a resistance level.
Should this trend hold, Bitcoin could see new highs, potentially surpassing recent peaks.
The State of Exchange Proof of Reserves Post-FTX Collapse
As the two-year anniversary of FTX’s collapse approaches on November 6, 2024, the importance of Proof-of-Reserves (PoR) among exchanges remains a hot topic.
FTX’s collapse, one of crypto’s most significant failures, exposed the dangers of inadequate reserves, underscoring the need for exchanges to publicly verify their assets to assure users of fund safety.
Most top exchanges now provide PoR reports, though the level of transparency varies.
For instance, Binance’s PoR includes public access to on-chain addresses, allowing anyone to verify their asset holdings.
This practice builds trust among market stakeholders by improving transparency in asset movements.
Despite regulatory challenges in the U.S., Binance has maintained stability, with Bitcoin reserves growing by 28,000 BTC or 5%, reaching 611,000 BTC.
This steady growth since the FTX collapse highlights Binance’s resilience, with reserve drawdowns consistently under 16%.
In contrast, Coinbase has yet to release a public PoR report, making it an outlier among top exchanges. Besides Binance, Bitfinex also recorded an increase in Bitcoin reserves, adding to its credibility.
With the overall market’s attention on security and transparency, the growing reserves of certain exchanges could signal their strength and ability to support user funds.
Key Levels to Watch for Bitcoin Price Movements
Two significant price levels, $69,870 and $72,380, have emerged as critical points with a high concentration of trading contracts. These levels could serve as strong support or resistance, as traders often exit positions at these psychological “breakeven” points.
Monitoring these levels becomes essential for assessing BTC’s short-term price movement, as they may prompt volatility when BTC approaches them.
After a recent correction, Bitcoin regained stability above $69,000, transforming previous resistance into a new support level. BTC’s price structure now resembles a double-bottom W pattern, a bullish indicator hinting at a potential breakout.
Additionally, the UTXO P/L Count Ratio Model suggests that there might still be room for a new all-time high before any potential peak.
However, with volatility expected near these psychological price levels, investors should watch BTC’s movement closely, as it could set the stage for a major breakout in the coming weeks.
