Bitcoin Retakes May Highs With Spike In On-Chain Activity, Next Target $60K?
October 11 2021 - 6:00PM
NEWSBTC
Anyone paying attention to Bitcoin in the past months will notice a
subtle, but importance change in its fundamentals. As BTC’s price
made its way back to May’s high, just before the first capitulation
event, there was an uptick in on-chain activity. Related Reading |
On-Chain Data Shows Bitcoin Miners Hold Off On Selling Despite BTC
Rallying Above $57k Unlike the sell-off period that occurred from
May to end of July 2021, there was an increase in Bitcoin
transactions. This rise led to an increment in network fees, as
shown by explorer Mempool.space. At the time of writing, a high
priority Bitcoin transaction needs to pay a 20 sat/vB to be
included in the blockchain, one of the highest fees in the past
month. Conversely, BTC trades at $57,632 with a 19.3% profit in the
daily chart. Although the Bitcoin network is still far from the
levels of activity experienced during its price peaked, the uptick
is significant and could point towards a sustain rally by end of
2021. According to a recent report by Glassnode, the boost in
network activity suggest fresh demand for Bitcoin could arrive to
the market in Q4. The research firm records a 19% grown in
individual participants on-chain during the past 7-days. Related
Reading | TA: Bitcoin Lacks Momentum Above $56K, Why Rally Isn’t
Over Yet This metric stands at 291,000 active entities per day.
Glassnode noted the following on what this could mean for BTC: This
value is on par with counts from late 2020 at the beginning of the
last bull run. More active market participants has historically
correlated with growing interest in the asset during early stage
bull markets. In addition, there has been an increase in the median
transaction size during September. This metric stands at over 1.3
BTC, the research firm claimed. A surge in the median transaction
size doesn’t necessarily implies a continuation of the current
rally, but suggest more institutions are coming into the market,
Glassnode added: Generally speaking, periods near the end of bear
markets are when smart money start to accumulate in size. These
periods are often characterised by lower (but rising) on-chain
activity and increasingly large transaction sizes. Bitcoin To Enter
Bullish Phase? Additional data provided by Glassnode notes an
increase in some important metrics. For example, the Bitcoin
Percent Supply in profit for the past week reached a 4-month high.
The transaction volume in the BTC Perpetual Futures Contract
reached a 3-month high of $281,278,010 on crypto exchange Bitfinex.
This suggest that the derivatives market is also starting to heat
up and could once again become an obstacle for the BTC bulls.
Related Reading | Why The $1 Trillion Coin Is Another Reason To
Stay Long Bitcoin However, the Transfer Volume as a percentage of
the Realized Cap, a metric used to compare on-chain activity with
the “value stored” in Bitcoin, recently rose above 3%. As Glassnode
indicated, this suggest BTC could be about to enterer a bullish
market phase. Transfer Volume has once again broken above the 3%
threshold suggesting growing demand for on-chain settlement of
value. This is a bullish a development worth watching in the coming
weeks based on its high historical signal.
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