- BTC recorded the highest daily number of active addresses on Aug. 2.
- The recent spike in network activity, surge in loss-making transactions, and growing negative sentiment are all indicators of a near-term price rally for Bitcoin.
The number of daily active addresses trading Bitcoin [BTC] surged in August to hit a three-month high of 1.07 million on Aug. 2, data from Santiment showed. The number of addresses that have completed BTC transactions continues to grow and today stands at 1.03 million.
As the number of daily active BTC addresses increases, so has the number of cryptocurrency transactions that have resulted in losses. An examination of the ratio of daily on-chain transaction volume to the coin’s profit and loss revealed this.
This indicator measures the value of an asset’s transactions that bring back profits equal to the value of its transactions, resulting in a loss within a single day. When the indicator is trending up and above the zero line, market participants are making more gains than losses. Conversely, market participants experience more losses when this indicator returns a value below zero.
The BTC daily on-chain transaction volume profit to loss ratio was -0.161 at press time, suggesting that more BTC transactions were yielding losses at the time of writing.
Additionally, weighted sentiment remains negative as the coin remains rangebound. According to Santiment, BTC’s weighted sentiment stood at -0.25 at press time.
Source: Santiment
According to Santiment:
“This increase in utility, combined with large losing trades and negative sentiment, is a strong sign that a near-term (at least) surge in $BTC price is more likely.”
But is the king coin ready for such a leap?
Finally a reason to smile?
According to an analysis of exchange activity, despite the strong resistance at $30,000 and trading in a tight range over the past two months, BTC holders have been reluctant to sell their coins.
A look at FX Reserves 30-day moving average showed a 1.4% drop over the past month. This metric tracks the total number of BTCs held on cryptocurrency exchanges.
As the value of BTC’s foreign exchange reserves increases, it indicates greater selling pressure as more coins are routed to exchanges for resale. On the other hand, a drop indicates a reduction in BTC distribution and is often a harbinger of a price surge.
Source: Santiment
In addition to the declining number of BTC sell-offs, most traders are betting on a price increase. This is evident from the funding rates in the futures market on leading exchanges, which show that there are more long traders than short traders. This is a positive sign as it suggests that many traders believe Bitcoin’s price will increase in the short term.
Source: Santiment
While these on-chain indicators point to a short-term price increase, it remains important to pay attention to macroeconomic factors that could negatively impact the BTC price.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.