Source: PaxForex Premium Analytics Portal, Fundamental Insight
Bitcoin, which has risen more than 60 percent since the beginning of this year, just had its best week since December 2020. While such periods often lead investors to expect a correction, there is every reason to believe that this could be the start of a new bull market.
Fortunately, because blockchain is open and transparent, the data can be extrapolated to show activity. Three metrics derived from bitcoin blockchain activity suggest that the worst of this latest crypto winter may be over.
Since the blockchain is essentially just a place for users to conduct transactions, it makes sense to measure activity by measuring the number of new users and the number of transactions. From this perspective, the simple concept of "the more, the better" tends to apply.
If you look at both metrics, one thing is clear: they are at levels today that have not been seen since the bitcoin price was well outside the previous bull market.
Instead of looking at the total number of addresses in the bitcoin blockchain, it is more profitable to measure the rate at which new addresses are attached. Judging by the latest data, the number of new addresses joining the network looks to be as high as it was in the spring of 2021 when bitcoin hit $63,500. Approximately 122,000 new addresses a day - the current rate of new entities being added to the network is higher than it was in 90% of bitcoin's existence.
As the number of users on the network increased, so did the number of transactions. Like the increase in the number of addresses, the number of transactions is at a level not seen since bitcoin reached its all-time high. Today, the number of daily transactions is just under 310,000, and in early 2023 it averaged over 8.5 million per month. The last time such a high was in March 2021.
There is another rather obscure metric that deserves a mention: miners' income from commissions. While this metric goes unnoticed, fee yields (rather than regular mining fees) tend to reflect the state of the market as a whole. When fee yields are negative, bitcoin is usually in the middle of a bear market. But when profitability changes, bull markets usually set in - and for the first time since the summer of 2021, miners are in the black.
Given these numbers, it's hard not to get excited about bitcoin's future. For the first time in nearly two years, there is good reason to be optimistic that crypto winter is finally starting to slowly recede.
For potential investors, however, there are even more good reasons to rejoice. While address growth, transaction counts, and miners' fee income are at levels not seen since the price of the major cryptocurrency was around $60,000, today its value is less than half of that level. If this dynamic continues, buying bitcoin today, while it is still far from its all-time high, could be a very profitable decision.
As long as the price is above 23750.00, follow the recommendations below:
- Time frame: D1
- Recommendation: long position
- Entry point: 27832.00
- Take Profit 1: 30000.00
- Take Profit 2: 33000.00
Alternative scenario:
If the level of 23750.00 is broken-down, follow the recommendations below:
- Time frame: D1
- Recommendation: short position
- Entry point: 23750.00
- Take Profit 1: 21300.00
- Take Profit 2: 19600.00
