Last week, we reported that Bitcoin’s metrics had taken a turn for the worst. Citing a report from blockchain analytics firm Coinmetrics, we wrote that “metrics for all the leading blockchains are currently on a downtrend. Bitcoin’s active addresses, active one-year supply, transaction count, aggregate transaction fees, aggregate transaction value, and other metrics have dropped, falling as the usage of BTC declines in tandem with price.”
However, it seems that over the past week, there’s been a reversal. In Coinmetrics’s latest report, it has been revealed that the metrics of the Bitcoin network are once again back in an uptrend.
The seven-day average for active addresses, for instance, are up 5.6%, which has been reflected in the number of transfers. Also, Bitcoin’s seven-day average hash rate has set a new high, hitting 76.7 exahashes per second.
As Timothy Peterson, a prominent cryptocurrency fund manager and investor, has pointed out on Twitter over the past few weeks, the fewer active addresses, the lower Bitcoin’s fair value. So, with a return in the number of active addresses, Bitcoin may begin trending higher once again.
It is important to note that there are some metrics currently falling, namely fees paid and the value of funds transferred. But, the hash rate of Bitcoin and the number of active users of the network is arguably more important.
The technicals also seem to support a return to a bull trend.
As reported by Ethereum World News, Murad Mahmudov of prominent crypto fund Adaptive Capital argued that Bitcoin is most likely to test $9,750 — the 0.618 Fibonacci Retracement of this whole cycle — in the following month in a bout of sideways price action, then “continue steadily upwards” to flirt with the $20,000 all-time high around the end of 2020.
He added that despite the MACD “bear cross” that BTC has just seen, each of these former technical occurrences “marked the local bottom every single time during the last bull cycle.”
And to put a cherry on the proverbial cake, the fundamental need for Bitcoin is only growing.
Bitcoin has been rallying as trade wars have erupted (China & U.S., Japan and South Korea, etc.), European and some Asian banks have been capitulating, Hong Kong and France have erupted in protest, and so on and so forth. With the world expected to become more tumultuous from here, this outperformance may only continue.