The world’s most valuable cryptocurrency, Bitcoin, recently had a recovery that saw it reach a new nine-month high in the mid-$26,000 range on Tuesday. A number of important technical and on-chain indicators have also recovered and are once again sending a positive BTC signal.
Even though the price of Bitcoin has once again fallen below $25,000 as of the Wednesday Asia Pacific session, BTC is still up over 27% from its lows of mid-$19,000 last week.
At the moment, the price was being affected by worries over a string of high-profile bank failures involving cryptocurrencies, startups, and IT.
Bulls, however, vigorously defended important long-term levels like the 200 DMA and Realised Price (both in the $19,700-800 zone). Then, rumours that US regulators will take action to 1) safeguard depositors and 2) launch a fresh $25 billion bank liquidity programme to improve balance sheets helped drive Bitcoin higher over the weekend.
Other important narratives driving the rally are: 1) the notion that concerns about financial stability make further Fed tightening much less likely; and 2) the notion that concerns about financial stability increase demand for Bitcoin, which stands for an alternative, decentralised financial system.
The tenacious defence of Bitcoin’s 200 DMA and Realised Price has also contributed to the rally’s growing confidence. After exhibiting some symptoms of weakness the previous week, the most recent rise has caused several important on-chain metrics to start trending positively.
Recovering From A Bitcoin Bear
The “Recovering from a Bitcoin Bear” dashboard from Glassnode keeps track of eight indicators to determine whether Bitcoin is trading above important pricing models, whether network utilisation momentum is rising, whether market profitability is returning, and whether the overall USD-denominated Bitcoin wealth is tilted in favour of long-term HOLDers.
A few months ago, the 30-Day SMA of new Bitcoin address creation crossed the 365-Day SMA, indicating an increase in the pace of new Bitcoin wallet formation. Historically, this has happened when bull markets first began.
The indicator that changed direction on Wednesday was Revenue From Fees Multiple, which then changed direction again on Thursday. The number of standard deviations above or below the mean of a data sample is known as the Z-score. The amount of standard deviations above or below the mean Bitcoin Fee Income over the last two years is what makes up Glassnode’s Z-score in this case.
Analysis of Bitcoin Market Cycles Also Give Reason to be Bullish
The previously mentioned positive change in Bitcoin’s on-chain trends coincides with other, more frequently cited so-called “core” on-chain metrics, such as the number of active addresses, the number of addresses with a non-zero balance, the rate of new address creation, and the number of daily transactions, all of which have been trending positively and are indicative of growing demand to use the Bitcoin blockchain.
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