Analysts expect Bitcoin price to hit new all-time high ahead of Taproot upgrade
- Taproot is the most significant upgrade to the Bitcoin network since the SegWit upgrade of 2017.
- Bitcoin mempools continued to be empty even throughout the recent price discovery, implying scope for increased retail activity.
- Analysts affirm that on-chain activity in BTC is expected to rise, pushing Bitcoin price higher.
Taproot activation, an upgrade that promises to expand Bitcoin’s smart contract flexibility and enhance privacy on the BTC network, was confirmed in June 2021 after 90% support from qualified blocks mined over two weeks. The upgrade is set to go live on November 16.
Bitcoin Taproot upgrade to boost the network’s security and privacy
The Bitcoin network’s most significant upgrade was the adoption of SegWit in 2017. SegWit helped Bitcoin scale by enabling the launch of the Lightning network.
By increasing the block size limit in the BTC blockchain, SegWit helped by pulling signature data from Bitcoin transactions. Segregation of transaction signatures still meant that the signatures were recorded on the blockchain.
The Taproot upgrade, ensures higher privacy by combining public keys and signatures into “threshold public keys” and “threshold signatures.” This makes them indistinguishable from regular transactions and increases the privacy of participants in the BTC network.
Two weeks from now, Bitcoin’s Taproot upgrade will activate at block 709,632.
Analysts have noted uncertainty in the BTC price trend and have predicted it may last until the end of November.
Alex Gladstein, cryptocurrency analyst and Chief strategy officer at Human Rights Foundation, believes that the Taproot upgrade is certainly not priced in Bitcoin yet.
Taproot: definitely not priced inhttps://t.co/HatKMSRGrO
— Alex Gladstein ⚡ (@gladstein) October 26, 2021
Jan Wuestenfeld, an analyst at CryptoQuant, has observed that the Bitcoin mempool continues to be empty throughout the most recent price discovery.
Mempools are a cryptocurrency’s node mechanism for storing unconfirmed transactions. The BTC mempool is considered a waiting room for transactions yet to be included in blocks. An empty mempool is considered a sign of a market's slowness or lack of retail activity in the asset.
A slump in BTC network transactions empties the Bitcoin mempools more often. Wuestenfeld considers that retail euphoria is needed to reach a new all-time high in Bitcoin.
Wuestenfeld states,
So [it is] not unlikely that activity will reach new highs as well during this bull-run despite LN [Lightning Network] adoption.
FXStreet analysts have evaluated BTC price trends and predicted a Bitcoin rally to $77,000 in the ongoing bull run.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
