• 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. 

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. 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Ripple price sees investors bracing for Powell late Wednesday with $0.44 in the cards

Ripple price sees investors bracing for Powell late Wednesday with $0.44 in the cards

XRP price will see traders mainly focusing on the Powell speech later today at the Brookings Institution. With many questions being raised and Fed members contradicting one another, markets will be hanging on every word coming from Powell’s mouth to get a clearer view of what the path will be going forward.

More Ripple News

ECB director calls for Bitcoin ban, says BTC is not suitable for payments or investments

ECB director calls for Bitcoin ban, says BTC is not suitable for payments or investments

The European Central Bank (ECB) detailed its stance on Bitcoin (BTC) and the cryptocurrency ecosystem in a blog post on November 30. In this article, the financial institution outlined the stark differences between regulation of digital assets in Europe and the US and that they should not be legitimized. 

More Bitcoin News

Solana price in for a surprise as markets expect Powell to bring out the reindeers

Solana price in for a surprise as markets expect Powell to bring out the reindeers

Solana price is at the cusp of starting the long-awaited Christmas rally. SOL could be seen jumping 37%, making it its best performance for the year.

More Solana News

Three on-chain metrics suggest Bitcoin price has bottomed, here’s where BTC is going next

Three on-chain metrics suggest Bitcoin price has bottomed, here’s where BTC is going next

Bitcoin price has triggered a 5% upswing overnight, slicing through critical hurdles. Three on-chain metrics suggest that BTC might have bottomed and has kick-started another bear market rally.

More Cryptocurrencies News

Bitcoin: Assessing chances of one last bear market rally for 2022

Bitcoin: Assessing chances of one last bear market rally for 2022

BTC is in a good place to trigger another bear market rally from a high-time frame perspective. This development, combined with the optimistic outlook seen in on-chain metrics, further strengthens the possibility of a happy ending to 2022.

Read full analysis

BTC

ETH

XRP