Short positions worth nearly $ 40 million have been liquidated following Bitcoin’s recent upside momentum. Now that Bitcoin has broken through $ 57,000, a new ATH appears to be very close.
The activity of the Bitcoin network is increasing
Bitcoin is still on an upward trend.
The top cryptocurrency has raked in $ 2,400 in the past few hours as it tries to move to a new all-time high. It hit $ 57,841 high for the first time in five months last night and is now only 12.3% off the high of $ 64,800.
Anyone who has brought up Bitcoin in the past few months will have noticed a small but important change in its fundamentals. As the price returned to the May high just before the first surrender event, activity in the chain spiked.
In contrast to the sell-off, which took place from May to the end of July 2021, there was an increase in Bitcoin transactions, which led to increased network fees, as the explorer Mempool.space found.
At the time of writing, a high priority Bitcoin transaction must pay 20 sat / vB to get on the blockchain, one of the highest fees in the last month.
While the Bitcoin network is still far from its peak, the current numbers are sizeable and could point to an ongoing rally through the end of 2021.
According to a recent report from Glassnode, the surge in network activity suggests new demand for bitcoin may hit the market in Q4, with the company posting 19% growth in individual members in the chain over the past 7 days 291,000 active units per day.
“This value corresponds to the status at the end of 2020 at the beginning of the last bull run. Historically, more active market participants correlate with an increased interest in the investment during the bull market in the early phase. “
In addition, the average transaction size rose to over 1.3 BTC in September, the research firm claims.
“In general, the period near the end of a bear market is when smart money begins to pile up. These periods are typically characterized by lower (but increased) on-chain activity and ever larger transaction sizes. “
Also, the percentage of Bitcoin supply that has been profitable over the past week has hit a 4 month high since Bitcoin magazine reported.
Bitcoin whales are piling up
On-chain data shows bullish price movements supported by buying pressure on the spot market. The behavior analysis platform Santiment found that whales are contributing to the rise in prices by amassing a large amount of assets.
Addresses holding between 100 and 1,000 BTC have bought over 60,000 BTC worth about $ 3.4 billion since the beginning of the month. In the meantime, over 20,000 BTC have been withdrawn from exchange wallets in the same period.
These supply-demand dynamics show that selling pressures are decreasing. However, Bitcoin still has one obstacle to overcome before it can hit higher highs.
IntoTheBlock’s In / Out of the Money Around Price (IOMAP) model shows that approximately 1.12 million addresses previously purchased nearly 417,000 BTC at an average price of $ 57,900. A daily close above this resistance wall could pave the way for a new all-time high, as IOMAP does not show any further hurdles.
It’s worth noting that Bitcoin will need to hold above the USD 54,900 support area to avoid further losses. Falling below this significant range of interest could encourage investors to sell BTC to avoid losses. If so, it could drop to $ 50,000 before Bitcoin resumes its upward trend.
In addition, the trading volume in BTC Perpetual Futures on the Bitfinex crypto exchange reached a three-month high of USD 281,278,010. This shows that the futures market is also heating up and could again become an obstacle for BTC bulls.
However, the volume of remittances as a percentage of real capitalization, a metric used to compare on-chain activity to “stored value” in Bitcoin, has recently surged to over 3%. This suggests that BTC is on the verge of creating a bull market phase.
Join Bitcoin Magazine Telegram to keep track of news and comment on this article: https://t.me/coincunews