“How many unspent bitcoins exist?”
“How many bitcoins have been lost?”
“How many bitcoins are left sitting in wallets, and how does this affect price?”
If any (or all) of these questions have ever popped into your head, you’re in good company: They’ve crossed the minds of analysts at Delphi Digital, the self-named “research & consulting boutique specializing in the digital asset market.”
The firm just released research on the current state of the bitcoin market, and they believe they’ve forecasted a potential bottom for its declining prices (FYI, they think it’s coming sometime in Q1 of 2019, but more on that later). Delphi Digital gave us an early peek at the report before announcing it on social media January 10.
This report isn’t your typical, shot-in-the-dark price signal from an old bull, Twitter trader or crypto entrepreneur. They didn’t use the usual magic tricks of technical analysis or rehash arguments of fundamental value. They’re making their call by referencing unspent transaction output data (UTXO).
Methods and Findings
The report, titled “Bitcoin Holder Analysis Through Cycles,” builds on analysis Delphi Digital conducted for an earlier report entitled “The State of Bitcoin.” Namely, it creates a price forecast by viewing selling pressure through the lens of UTXO.
Looking at UTXO data, Delphi Digital was able to pinpoint accumulation and selling patterns based on when unspent bitcoin either lay dormant or was moved to be sold. In its report, the firm claims that there “have been consistent trends in UTXO age distribution and how that distribution relates to time and price.”
Delphi Digital’s report comes with a handy graph to illustrate these trends. Positioned under a bitcoin price chart, the firm tracked the percentage of unspent bitcoins in ≤ 3 month,