BTC Network Indicates ‘Bearish Momentum’ But the Risk of Price Dump ‘Substantially Reduced’
Last week, Bitcoin’s price branched the key level $10,000 twice that had the market sentiments turning to “greed” from “extreme fear,” which has been in the market since February.
But now that we are below $9,000, the market has gone back into “fear,” as per Crypto Fear and Greed Index.
With block reward halving just a few hours away, the market is not exactly screaming bullish.
According to the actionable signals of IntoTheBlock, the market is in “bearish momentum.” These signals include the network not growing as fast as it has been the past few weeks.
Also, the accumulation by large holders has dropped just like the large transactions, those with over $100,000 value. Moreover, the price drop has less percentage of addresses in the money.
Although bearish momentum, the rise of a halving price dump has been “substantially reduced” by the current COVID-19 crisis, rather it has “potentially set up a Bitcoin bull market,” said Binance in its latest report.
Post halving, “a wave of profit halving” is expected as short-term traders exit the market. But these pullbacks could be temporary with “a great likelihood of Bitcoin making new highs in the coming months.”
Halving: What’s Different This Time Around?
The current momentum might not be bullish but compared to the past halving, a lot has changed and only for the better. Bitcoin fundamentals are stronger than ever and long-term bullish.
The number of bitcoin addresses has been steadily increasing and is currently at their all-time high, having recently crossed the 30 million addresses milestone as well. From the last halving four years ago, the addresses have increased by 234%.
At a similar pace, the daily number of addresses added to the bitcoin network is growing, up 68% from July 2016 halving.
When it comes to the number of retail addresses, those holding at least 0.01 BTC and 0.1 BTC, they hit fresh ATHs in 2020 about every other day. These addresses jumped by 204% and 142%.
Now those with at least 1 BTC made a new ATH, up about 64% from the last halving.
Though not at their peak, whales, investors holding over 1,000 BTC, are close to hitting a new ATH. However, the USD value these whales hold is more than 10x higher.
As per Glassnode data, the daily number of active addresses and entities has increased by over 55% since the last halving, steadily rising for the past three years and approaching the peak of the 2017 bull market.
Besides network activity, the hash rate made a new high this month and is up over 6800% since the halving four years ago.
During all this time, the bitcoin network system has been working like a clockwork, without stopping.