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Is The Bitcoin Surge Due To An External Reason? What The Data Suggests
The world’s first and largest cryptocurrency is making gallant steps towards the greens in a recent outturn of events. Bitcoin is experiencing a sharp rise in price within its market. Recent trading activities got BTC’s price to hit the $24,000 mark. This creates a positive record for the top cryptocurrency across the industry.
Though Bitcoin is making a tremendous improvement in value, its number of active addresses seems to be downtrend.
The sudden growth in price for BTC likely has little connection with the overview of the crypto market. This upward trend occurs due to external pushes that spiked the price. But the irony is that there is no notable rise in the number of its active wallets.
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Records from on-chain reports show that Bitcoin’s number of active wallets is relatively low. Crypto Quant, an on-chain analytics firm, gave its data indicating a downward move for the active addresses. It reports that new contracts are emerging in the futures market as prices keep surging.
This contradicts the current trend in the crypto futures market that depicts increasing momentum. Since the spike is not from an internal influence, the sustainability of the present positive pressure and price rise is quite unclear.
With new contracts opening, the futures market is experiencing higher crypto prices. Also, cryptocurrency short-term investors are taking up positions within the futures market. Such activities are invariably creating spikes in prices. Hence, the significant market price increase is the final outplay of the sudden rise in buying positions.
Possible Reversal On Bitcoin Short-Term Speculation
Additionally, the speculations on the short term in the futures market could make for a fast reversal at any point. Such indications could twist prices in the future in any direction.
The report from analytics firm Crypto Quant also confirms that using directional bets at the moment as it concerns vital macro data poses increasing doom. There are high possibilities of swift directional change in the short term. Hence, the importance of achieving sustainability would depend more on risk management.
Currently, the value of BTC is slightly above $24,000. The impact of macroeconomic activities during the week could trigger volatility in the Bitcoin price. Also, the U.S. inflation data, due on Wednesday, has a role in the overall outcome.
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Conversely, there seems to be a more accurate indication of the BTC price forecast for August. According to the community predictions, Bitcoin could hit the $28,000 level by the end of the month.
Featured image from Pixabay, chart from TradingView.com
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