Bitcoin continues to consolidate at $60,000; this indicator sends bullish signals
By Noemi Jansana / Alejandra Zamora
Date: Friday 05 Nov 2021
(Sharecast News) - Bitcoin has traded in a narrow trading range during the first week of November, when any attempt to rise was stopped at around $64,000, while $60,000 proved to be a formidable support. Nonetheless, the cryptocurrency that truly steals the show, is Ethereum. The crypto number two set new all-time highs on November 4 at 4,664, while other altcoins also made notable gains.
The total capitalization remains just below $2.8 trillion, but the market has experienced a generalized standstill since it became known that the US Federal Reserve (Fed) started 'tapering' and will gradually reduce its asset purchases. Experts point out that the money printing machine of the world's largest central bank has provided unusual liquidity to the market that has favored the rise of risk assets, such as cryptocurrencies. Because of this, there is great expectation about the behavior of these investments now that the tap will be closed.
"Bitcoin is slipping again today and could be set to test $60,000 once more", stated Craig Erlam, an analyst at Oanda. "It found decent support around here yesterday and recovered strongly and we may see more of the same as it closes in on that level", he added.
Conversely, a move below this area, according to Erlam, "could see a continuation of the post-ETF correction while another rebound could inspire a move back towards the highs." "Some may have been hoping the Fed would deliver, although what exactly that would have been I'm not sure. There isn't much that isn't bullish for Bitcoin these days, it seems," he added.
According to an analysis by the Santiment platform, there is one market indicator that sends very positive signals for the queen of cryptocurrencies. This week, the total number of active Bitcoin adresses on the network remained above the 1 million level for the fifth consecutive day. "Bitcoin had 5 consecutive days (excluding historically slow weekends) of over 1 million active adresses interacting on the BTC network. This increase is an encouraging sign that another all-time high may inevitably be tested," the firm wrote in a recent commentary.
Historically, the total number of daily active adresses interacting on the Blockchain, gave investors a clear signal about the potential price action of the digital asset. Moreover, a significant jump in the number had a positive impact on the price of the most traded of cryptocurrencies.
On the other hand, as quoted by 'Forex Magntes', other leading indicators of the overall health of the Bitcoin network, including the Bitcoin lightning network, have shown steady growth in recent days. During the first 10 months of 2021, nearly 9,200 nodes were added to that network. "This is a 111% growth rate in operational hardware," experts from Glassnode commented.
This increase in overall activity on the Bitcoin Blockchain supports the upward momentum, experts claim.
The cryptoasset "is at the gates of annual and historical highs and above that there is nothing. And everything is possible," José María Rodríguez, analyst at Bolsamanía, commented. "Also, as the most important support, we have the last great minimum of reaction: the September lows at $40,000 in the future. Control reference is far away from the current levels and therefore, this support is right now not operative at all". "Can we see $100,000? Of course, anything is possible. Both are a clear hold in portfolio, no doubt," the analyst added.
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