Last weekend, the Bitcoin price fell under the psychologically important assist degree of $50,000. Furthermore, the 50 day shifting common was breached to the draw back and a few in style technical indicators – such because the MACD – are flashing bearish warnings.
The confluence of downwards worth motion, bearish alerts, and destructive information stream (primarily; a rumored US regulatory crackdown and the Turkish ban & double alternate failures) suggests a bleak outlook for BTC… So, is Bitcoin doomed?
Recent Drop Brings Return Of Bitcoin Doomsday, But There’s Still Hope Left
Fortunately, there are causes for hope. Whereas short-term technical and sentiment alerts are decidedly bearish, sure elementary information means that the good bull market, begun in late 2020, nonetheless has legs. For occasion, the variety of people who personal Bitcoin – as measured by Glassnode’s Active Entities metrics – remains to be rising quickly. Veteran crypto worth analyst, Willy Woo, lately shared the next graph through Twitter:
Rapid development is clearly seen from August of 2020 and holding regular at current. | Source: Glassnode
“Anyone thinking we are going into a prolong[ed] price correction needs to know about the rate of new users coming into the network per day. We’re in the middle of a bull market with a hockey stick of new adoption, especially in the last 2 weeks,” Woo commented.
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Glassnode’s information is much extra dependable than the naive technique of counting whole or energetic Bitcoin addresses to estimate consumer numbers – in any case, any single consumer can create a virtually limitless variety of addresses to inflate such measures. While their actual strategies stay proprietary, Glassnode makes an attempt to map a number of addresses to particular person customers, and so depend solely the latter.
Drivers Of User Adoption In Cryptocurrency
There are numerous components driving consumer adoption, and one might simply level to the elevated visibility of Bitcoin because of its new all-time excessive or endorsements from influential enterprise leaders, equivalent to Elon Musk and Michael Saylor. Increasing institutional adoption, with such massive monetary gamers as MasterCard and BlackRock getting concerned, actually doesn’t damage the coin’s credibility within the in style thoughts both.
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In the broader context, it’s doubtless that the deteriorating worth of fiat performs a serious function in Bitcoin consumer adoption. Global inflationary expectations – and certainly, observations – stay excessive. Central banks world wide printed unprecedented quantities of recent fiat to offset the financial harm of governmental lockdown insurance policies.
With the price of items and companies up and largely anticipated to go larger, widespread demand for deflationary financial options like Bitcoin makes good sense. This is particularly true within the present context of under-performance by conventional onerous cash choices, like gold and silver.
Bitcoin worth rises as extra consumer undertake the expertise | Source: BTCUSD on TradingView.com
So lengthy as Bitcoin adoption by new customers is growing, the prospect of a protracted bear market appears unlikely. If adoption has been rising all through the bull pattern, as Glassnode’s information signifies, evidently larger costs usually are not deterring new entrants to the market.
With Bitcoin now buying and selling “at a discount” in comparison with its current all-time excessive round $64,500, it’s doubtless that ample demand, maybe spurred by bargain-hunting, stays out there to offer worth assist.
Featured picture from Pixabay, Chart from TradingView.com