UTXOracle Chart Overview

The UTXOracle is a decentralized tool designed to estimate Bitcoin's daily price by analyzing on-chain transaction data, eliminating the need for centralized exchange information. Developed by @SteveSimple, this open-source program connects directly to a local Bitcoin node, ensuring that all users derive the same price estimate without relying on external data sources. More details are available at utxo.live/oracle.

How It Works

• Transaction Analysis: UTXOracle examines patterns in on-chain transactions, focusing on clusters of payments made at round USD amounts (e.g., $20, $50, $100, $1000). These clusters represent the values users are transacting, providing insight into the perceived value of Bitcoin at specific times.
• Price Estimation: By identifying and averaging these transaction clusters, UTXOracle calculates an estimated daily price for Bitcoin. This method reflects the actual usage and valuation by participants on the Bitcoin network, offering a decentralized price discovery mechanism.

The UTXOracle Chart

• Heatmap: The chart's heatmap visualizes the density of transaction amounts at various price levels over time. Brighter areas indicate higher concentrations of transactions at specific price points, revealing where users are most actively transacting.
• Yellow Line: Overlaid on the heatmap, the yellow line represents Bitcoin's spot price sourced from Binance. Comparing this line to the heatmap allows users to observe how closely the on-chain transaction-based price estimates align with exchange-reported prices.

By leveraging actual transaction data, UTXOracle offers a transparent and decentralized approach to Bitcoin price estimation, reflecting the value as determined by the network's participants.