Bitcoin low transaction levels and bearish sentiment suggest BTC price is ready for another leg up


  • Bitcoin price rally toward $50,000 has interestingly not yielded any positive sentiment around the leading digital asset.
  • Bitcoin transactions have reached a historic low as the bellwether cryptocurrency continued its rally.
  • On-chain data indicate that older coins are increasingly being sold, most likely due to strategic de-risking.

Bitcoin price surged above $50,000 for the first time since mid-May, surging 72% from the July 20 low. Despite the massive move in the bellwether cryptocurrency’s price action, blockchain analytics firm Glassnode pointed out that the transaction volumes are low.

Bitcoin transactions hit historically low levels

According to Glassnode, on-chain activity for Bitcoin has not responded to the bullish price action, as BTC transactions remain at historically low levels of 175,000 to 200,000 transactions per day. 

In the past five years, the low levels have been seen during the 2016 to 2017 bull market and the subsequent pullback, and the 2018 to 2019 bear market when Bitcoin dropped over 85% from its high.

Currently, after almost three months of consolidation, transaction volumes are also depressed, as the Bitcoin network is recording roughly $18.8 billion in daily volume. Glassnode highlighted these levels are 57.6% lower than the May capitulation event.

The blockchain data firm further added that the rising prices and low on-chain activity points to an extraordinarily macro bullish outlook. Long-term holders have reached an all-time high, exceeding the previous record in October 2020.

In addition, there was a noticeable increase in older coins getting sold. Glassnode explained that since the spending was of low coin volume, it could be for strategic de-risking rather than a loss of conviction in the bullish outlook on Bitcoin. 

During the recent Bitcoin recovery toward $50,000, the social sentiment around the leading cryptocurrency has stayed relatively mild, according to analytics firm Santiment. 

When comparing the Bitcoin mentions with other cryptocurrencies, the bellwether digital asset has not gained social dominance during its rally to $50,000, unlike previous rallies. 

Interestingly, the mood around BTC mentions has also declined throughout August, suggesting that retail investors were getting more bearish as Bitcoin price edged closer to the $50,000 mark.

The lack of attention on Bitcoin could be good for the cryptocurrency, as historically, surging social volumes and extreme bullish sentiment have usually led to price tops, according to Santiment.

Bitcoin price steadies before the next climb

Bitcoin price sliced above $50,000 on August 23, rallying toward the 61.8% Fibonacci extension level. However, BTC is likely to move sideways steadily before another massive move is to be made.

On the upside, the next target for Bitcoin price is at the 61.8% Fibonacci extension level at $50,938 on the daily chart. The Arms Index (TRIN) also provides a bullish bias for the leading cryptocurrency, suggesting an overall greater buying volume than selling volume.

BTCUSDT

BTC/USDT daily chart

Bitcoin price must also slice above the resistance line given by the Momentum Reversal Indicator (MRI) at $51,529 before it can target bigger aspirations. A spike in buying pressure could see BTC target the 78.6% Fibonacci extension level at $56,955 in the longer term.

 

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

Latest Crypto News


Latest Crypto News & Analysis

Editors’ Picks

Shiba Inu to flip Dogecoin as analysts see SHIB price rising to $0.01

Shiba Inu token emerged as the third most traded cryptocurrency in the past 24 hours after hitting a new all-time high. Experts have predicted that the memecoin will soon rank in the top 10 cryptocurrencies by market capitalization. 

More Shiba Inu News

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Crypto markets coil up for an explosive move

Bitcoin price has been due for a retracement after rallying for three straight weeks in October. This came on October 21, when BTC began a correction that is now holding up pretty well above a psychological barrier.

More Bitcoin News

Chainlink partners with AP while LINK price prepares for 50% advance

Chainlink price has been struggling for after May 19 crash and has stayed below a crucial barrier since then. However, LINK is turning around as it coils up to grapple with this hurdle and trigger a new upswing.

More Chainlink News

Ethereum heads toward ETH2 and Triple Halving with Altair upgrade on October 27

Following the launch of EIP-1559, the next key upgrade adds features to the beacon chain before the merge. The Altair beacon chain may be the only upgrade to the Ethereum network before transitioning from proof-of-work to proof-of-stake. Despite the drop in prices of most DeFi tokens, TVL crossed $100 billion last week.

More Ethereum News

BEST CRYPTO BROKERS/EXCHANGES




Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive

Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.

Read the weekly forecast

BTC

ETH

XRP