Key Points
Increased UTXOs and Premium Indexes
Since the start of February, there has been a noticeable increase in Unspent Transaction Outputs (UTXOs) ranging from 1,000 to 10,000 Bitcoins. This data comes from CryptoQuant, a reputable on-chain data provider. A UTXO in Bitcoin is a measure of the amount of cryptocurrency left in a wallet address after a transaction has been completed.
From February 1st, the UTXO of Bitcoin holders who possess between 1,000 to 10,000 BTC has risen by 2%. Typically, a spike in UTXO along with a price rally suggests that institutional investors are accumulating more of the cryptocurrency. This could also indicate that Bitcoin whales are buying large quantities of Bitcoin and splitting them into smaller UTXOs for storage or further investment.
CryptoQuant analyst Crypto Dan, who prefers to remain anonymous, commented on the increase in UTXOs ranging from 1,000 to 10,000 BTC. He stated that these amounts are more likely to be associated with whales or institutional investors rather than individuals, especially since the recent approval of Bitcoin spot ETFs. According to Dan, while the recent rise in UTXO for the considered BTC value band is not as significant as the latter part of the bull market in 2021, it still shows an influx of institutional liquidity into the market.
This was confirmed by looking at the coin’s Coinbase Premium Index (CPI). This index measures the difference between Bitcoin prices on Coinbase and Binance. A positive and rising CPI value indicates strong buying pressure among US-based institutional investors on Coinbase.
Since the start of February, Bitcoin’s CPI has been above the zero line. It even reached a year-to-date high of 0.122 on February 14th, suggesting an increase in the presence of institutional investors in the market on that day. Even though it was approaching the center line at the time of writing, Bitcoin’s CPI still had a positive value of 0.004.
On the other hand, while Bitcoin’s CPI has been trending downward since its peak on February 14th, the coin’s Korean Premium Index (KPI) has been rallying significantly in recent weeks. The KPI measures the price difference between South Korean exchanges and other exchanges. When Bitcoin’s KPI rises in this way, it indicates a surge in buying pressure among Korean retail investors.
However, despite the 25% increase in Bitcoin’s value over the last month due to increased market participation, analyst Dan issued a warning. He stated that in bull markets, after a significant influx of institutional investors, new individual investors often enter the market, which typically signals the end of the bull run.
