BITCOIN EYE $60K AS ACTIVE ENTITIES SURGE, PRICE CHART SHOWS IMPENDING BULL CROSS

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The pop­u­lar­i­ty and adop­tion of cryp­tocur­ren­cy, blockchain tech­nol­o­gy and decen­tral­ized finance is open­ing new finan­cial doors for devel­op­ers, investors, gamers and traders alike. And a rip­ple effect of crypto’s adop­tion is that bitcoin’s price, as well as oth­er alt­coins, will increase.

The grow­ing need for a decen­tral­ized finan­cial sys­tem and web3.0 is great news for bit­coin because it means more peo­ple are will­ing to buy bit­coin, tak­ing the bet with oth­er new­er tech­nolo­gies such as decen­tral­ized apps, DAO, and decen­tral­ized exchanges. And oh, there are NFTs too, the coolest mem­ber of the decen­tral­ized and dig­i­tized family.

Recent increased activ­i­ty of the bit­coin blockchain is indica­tive of where the future of finance is head­ed: decen­tral­ized finance.

While bit­coin doesn’t offer the absolute best solu­tions to cen­tral­ized ques­tions and how to beat them, the blockchain tech­nol­o­gy opened the flood­gates for oth­er blockchain tech­nol­o­gy such as ethereum, solana, polka­dot etc.

Tech­ni­cal indi­ca­tors on the bit­coin price graph shows that the price of bit­coin will only increase in the com­ing years, some even pre­dict­ing that it will get to $100,000 before the end of the year, an all-time high. The recent ascent, which saw bitcoin’s price go as high as $67,000, is only but a tip in the ice­berg of where bit­coin is going.

The future looks so damn bright for bit­coin and cryptocurrencies.

But what’s the rea­son behind the ascent, and what indi­ca­tors show that the price of bit­coin will only increase? Did the price just go up — and promis­es to increase — just because peo­ple want­ed it to?

The price of bit­coin rose by 30% in Octo­ber on redot cryp­to exchange, sur­pass­ing Ethereum’s price increase. The price increase as well as adop­tion was not the only pos­i­tive dur­ing Octo­ber; the num­ber of activ­i­ties on the bit­coin blockchain increased by 19%.

What does an increase in blockchain activ­i­ty mean?

Sim­ple: More peo­ple are get­ting involved with bit­coin, there­fore more min­ers are try­ing to solve math­e­mat­i­cal equa­tions to mine bitcoin.

The increase in active mar­ket, accord­ing to Glassnode, is when the sim­i­lar address­es con­trolled by the same net­work, e.g. pri­vate or pub­lic blockchain, are car­ry­ing out trans­ac­tions on the bit­coin blockchain.

The rea­son behind the increase in the active mar­ket can be tied to sev­er­al fac­tors, but the most impor­tant rea­son is that big finan­cial insti­tu­tions are buy­ing bitcoin.

And why are these insti­tu­tions buy­ing bitcoin?

They are bet­ting on bit­coin becom­ing a main­stay in the finan­cial mar­ket, even replac­ing fiat cur­ren­cy as we know it. Many insti­tu­tions see the poten­tial of dig­i­tal cur­ren­cies and the crav­ings for decen­tral­ized finance, and are hedg­ing their funds with bit­coin since it is the first cryp­tocur­ren­cy and the best store of val­ue right now.

When one looks at the stats, there is a sharp increase in the num­ber of active mar­kets — increased buy­ing and sell­ing — the high­est on bit­coin blockchain in more than five months. When there is a sub­stan­tial increase in active mar­kets, the record shows, the price of bit­coin will increase sig­nif­i­cant­ly. The 2020 price increase gives us a good ref­er­ence point.

At the end of 2020, the num­ber of active mar­kets increased sig­nif­i­cant­ly, and bitcoin’s price fol­lowed with a shot in the arm, increas­ing in turn.

This pre­dic­tion of bitcoin’s price increas­ing in the com­ing months is true because its price reached $67,000, an all time high.

ON-CHAIN TRANSACTIONS INCREASED

On-chain trans­ac­tions are finan­cial trans­ac­tions that min­ers on the blockchain approve using a series of codes called hash. These min­ers must agree that the trans­ac­tion ini­ti­at­ed by some­one is legit, and after they’ve approved it, the trans­ac­tion appears on the open ledger, on the blockchain. With this type of trans­ac­tion, 51% of par­tic­i­pants on the net­work must agree to the valid­i­ty of the trans­ac­tion before it is approved as legit and record­ed on the ledger.

With on-chain trans­ac­tions, the ‘con­fir­ma­tion time’ is longer and the fees are high­er, there­by mak­ing it unhealthy to the envi­ron­ment and expen­sive for traders.

As more big finan­cial insti­tu­tions adopt bit­coin, the on-chain trans­ac­tion has increased from 0.6 BTC to 1.3 BTC.This is wor­ry­ing for envi­ron­men­tal activists.

WHAT DOES INCREASED ON-CHAIN TRANSACTION MEAN?

With increased on-chain trans­ac­tions, the price of bit­coin will not increase auto­mat­i­cal­ly. There is no direct cor­re­la­tion between more peo­ple trans­act­ing bit­coin on the blockchain and the price increas­ing; how­ev­er, the increase is a clear indi­ca­tion that more bit­coins are being trans­act­ed, that insti­tu­tions are car­ry­ing mil­lion dol­lar trans­ac­tions on the network.

There­fore, if more insti­tu­tions are car­ry­ing out huge amounts of bit­coin trans­ac­tions, it means the adop­tion is spread­ing, and soon, bit­coin and cryp­tocur­ren­cies will be accept­ed as offi­cial cur­ren­cies in coun­tries and inter­na­tion­al markets.

TECHNICAL DATA PREDICTS THAT THE UPTREND WILL CONTINUE

On-chain data, which has been bull­ish for a while now, on bit­coin usd trad­ingview, showed that the mov­ing aver­ages – 100-Day Mov­ing Aver­age and the 200-Day Mov­ing Aver­age – have expe­ri­enced a bull­ish run. The last time a bull­ish crossover hap­pened was more than 16 months ago.

So, what is a bull­ish crossover and what does it mean for the mar­ket and the price of bitcoin?

When the 200-day MA ris­es above the 100-day MA, it is called a bull cross. Bull cross­es indi­cate the pos­si­bil­i­ty of a bear­ish or bull­ish mar­ket. Bit­coin price his­to­ry proves that an uptrend is like­ly to happen.

Some­thing sim­i­lar to the cur­rent bull price cross hap­pened in June 2020 after there was a bull­ish cross in May 2019, which caused the price of bit­coin to rise from $8,300 to $64,300. It was a 10-month bull run.

CAN WE TRUST THE CROSSOVER?

For traders and investors on Redot.com, there is increased antic­i­pa­tion that bitcoin’s price will con­tin­ue the bull­ish run and hit a new ATH.

But there are no guarantees.

How­ev­er, bit­coin price his­to­ry shows that long-term mov­ing aver­ages are not good enough tech­ni­cal indi­ca­tors in and of them­selves to pre­dict where the mar­ket will head.

There is a need to com­bine the bull cross­es with oth­er tools such as the MACD, Ichiki­mo clouds and oth­er tech­ni­cal tools when analysing the cryp­to future swing of the market.

The unpre­dictabil­i­ty of the 100 and 200-Day MA was in full swing in mid-July when bit­coin bot­tomed at #30,000 after bear­ish cross just weeks before.

HOW NETWORK ADOPTION’S INCREASE AS WELL AS PRICE’S CONFIRMS AN UPTREND

Bit­coin has, over the years, increased in its price despite the crit­i­cisms about its use­ful­ness. As more peo­ple get involved with cryp­tocur­ren­cy, and big busi­ness­es adopt bit­coin as a legal ten­der, the price of bit­coin will increase.

Why?

Because the price of an asset is depen­dent on the per­ceived val­ue. If peo­ple val­ue an asset at $400, then the asset is worth $400, whether or not any­one else thinks the price should be more or less.

Many cryp­tocur­ren­cy enthu­si­asts and investors have been clam­our­ing for bit­coin and alt­coins to be accept­ed in the main­stream finan­cial sec­tor, and we are see­ing it right before our eyes: the mass adop­tion of bitcoin.

Bit­coin, it seems, has moved past the ear­ly adopters stage. More insti­tu­tions are trust­ing bit­coin, buy­ing mil­lion dol­lars of it. For whales and insti­tu­tions, buy­ing an asset means they believe the asset has poten­tial to be prof­itable in the near­est future.

The series of bans from coun­tries have done lit­tle to derail the world from see­ing the pow­er of decen­tral­ized finan­cial sys­tems. More and more big indus­try play­ers are enter­ing into the cryp­tocur­ren­cy space, for exam­ple, Face­book and Mastercard.

The change of name from Face­book to Meta is a big indi­ca­tion that NFTs and blockchain tech­nol­o­gy will rule the future.

And the one cur­ren­cy that would lead the way, giv­en it is the first dig­i­tal cur­ren­cy built on blockchain tech­nol­o­gy that has wide accep­tance is bitcoin.

The big banks and lend­ing insti­tu­tions are buy­ing bit­coin, using it as a hedge over their invest­ments. Invest­ment banks are invest­ing in bit­coin-relat­ed com­pa­nies. Bit­coin ETFs are on their way in the Unit­ed States.

These fac­tors show that bit­coin is no longer just ‘dig­i­tal cur­ren­cy for the poor’; even the rich are see­ing its importance.

As tech­nol­o­gy evolves and web3.0 greets us all, bit­coin will lead the way, at least in the next five to ten years.

So, as investors and traders wait for bit­coin to reach $100,000 before the end of 2021, and more hope that swings will be less often so that there will be sta­bil­i­ty, bit­coin has come to stay. The uptrend will con­tin­ue, with bumps in the way.

 

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