The Bitcoin bulls always have many reasons to be optimistic. On Wednesday, the leading cryptocurrency reached its highest level in 2020 at $ 9,443. Since the beginning of the year until now, BTC has increased by over 30% and continues to show signs of sharp increase.
Bitcoin is currently close to the resistance range of a key metric. I am referring to the number of investors joining the Bitcoin market on a daily basis. The increase in the number of entities joining shows that many people are using cryptocurrencies. This metric is very relevant as acceptance finally increases, cryptocurrencies have launched a bull market.
The number of Bitcoin holders compared to the net growth of entities
Determining the number of holders or users of Bitcoin is a difficult task. Doing that will have two obstacles:
- A holder may have multiple wallet addresses.
- A Bitcoin wallet address – such as an exchange wallet, can hold the funds of many individuals.
Therefore, in order to have a good measure of widespread adoption, blockchain intelligence company Glassnodes has created a map of the number of entities controlling multiple wallet addresses. Currently, this is the nearest time you can get the best number of Bitcoin holders. According to Glassnodes:
“This is the first study to introduce more sophisticated quantification of Bitcoin entities – far beyond the number of simple addresses and simplified guessing methods.”
The number of entities skyrocketed ahead of the 2017 price race
With that in mind, Glassnodes has charted the daily net growth of entities. Moreover, this is a stricter measurement than the number of users who are using Bitcoin. Because it outlines many addresses leading to a reality. In addition, this data also looks at entities with a BTC balance of zero but whose balance is greater than zero previously. It is not surprising to see Bitcoin price increase as the daily net growth of entities increases.
A Twitter account called “CryptoKea” has discovered an important point that this data must be very hard to come up with. In the chart above, that point is marked with a red dotted line. Whenever the entity's net growth increases (shown by the green line) reach that resistance, something positive happens. This essentially means that whenever a new user receives a bitcoin address, the price of Bitcoin usually rises.
For example, Bitcoin triggered a parabolic price increase in October 2017. This coincided with many new users creating their Bitcoin address. Then, from April 2019 to June 2019, Bitcoin soared from $ 5,000 to nearly $ 14,000, which coincided with the rise of new users.
The same thing happened this month: Bitcoin rose from $ 7,000 to over $ 9,000. The only difference was in October 2018 when the number of users creating a Bitcoin wallet address was very high but the price of Bitcoin dropped from $ 6,600 to nearly $ 3,000 in December 2018.
Glassnodes explained that the daily net growth of entities was extremely positive. Crypto intelligence firm emphasized:
“This is a clear sign of healthy and consistent Bitcoin adoption over the past 10 years.”
Bitcoin flashes many bullish signals
In October 2018, the net growth of entities spiked may be because many people expected that $ 6,000 would be the bottom of the Bitcoin discount market. But this time is different, because the king coin looks very strong.
Fundstrat's Thomas Lee shared on Twitter that Bitcoin is trading above the 200-day moving average. This is essentially a signal that BTC is entering the rising territory.
– Thomas Lee (@fundstrat) January 29, 2020
I believe the prevailing bullish sentiment will spur the growth of new entities. If history repeats itself, Bitcoin price could be ready for a breakout.
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According to CCN
Translated by ToiYeuBitcoin