The percentage of Bitcoin Unspent Transaction Outputs (UTXOs) in profit has fallen to its lowest level this year, last seen in October 2023. This decline in this metric aligns with the current plunge in bitcoin’s (BTC) price and the downward trajectory of the broader crypto market.

According to a report by CryptoQuant analyst EgyHash, this could be a sign of an incoming massive rally.

A Bitcoin UTXO refers to the amount of cryptocurrency that remains after a transaction on the network. Analyzing UTXOs is often crucial in understanding investor behavior over different periods.

In June, 99% of Bitcoin UTXOs were in profit; however, that number had declined to 68.5% by September. EgyHash said the plunge suggests that some market participants have realized profits on their BTC investments, and their actions, coupled with ongoing selling pressure, have contributed to a fall in the value of the world’s largest cryptocurrency.

The last time the UTXOs in profit witnessed a similar decline, bitcoin’s price skyrocketed to a new all-time high, rising 273% from $26,700 to $73,000. This means a fall in this metric gives room for BTC to rally and possibly touch new highs. EgyHash’s analysis aligns with on-chain experts’ predictions of a second leg of the BTC bull run in the coming months.

An Incoming BTC Rally

Another pseudonymous CryptoQuant analyst, Avocado, observed a slight uptick in Bitcoin UTXOs under six months, which they classified as new investors who entered the market earlier this year, likely around March, when BTC hit its all-time high.

Comparing the Bitcoin UTXOs under six months to past cycles, Avocado identified a similar pattern in 2019; investors holding the UTXOs have either exited the market due to losses stemming from bitcoin’s current state or held their BTC and transitioned into the six-month-and-above group. Regardless, bitcoin’s trajectory within the following 490 days led to a new all-time high.

Besides the decline in UTXOs in profit, bitcoin’s price has been stagnant for an extended period. Avocado attributed this stagnation to the reduced price volatility stemming from a relative increase in over-the-counter trading compared to exchange-based trading.

“While I have no doubt about the long-term upward trend, in the short term, I believe it’s wise to temper expectations and closely monitor the market,” Avocado stated.