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10 signs that bitcoin could go up (or down) in price, according to Glassnode

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Key facts:
  • Glassnode points to low network activity and declining mining profitability as negative factors.

  • On the positive side is the accumulation of BTC and the withdrawal of coins from exchanges.

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As the price of bitcoin (BTC) remains in a narrow range and does not take a clear direction in the market, uncertainty grips investors: will it go up? Will it go down? How long will it remain so stable? These are the most frequently asked questions about the price of the market’s leading cryptocurrency.

Analysis firm Glassnode has possible answersbut the direction the price will take does not seem to be clear either. In his most recent market bulletin, Glassnode elaborates on the potential motives that could move the price of bitcoin.. Whether upward or downward, while volatility remains at levels remarkably low.

This scenario, according to analysts, is very rare in historical terms for BTC. And normally, as we reported in CryptoNews, usually precede strong price movements. “There are historical examples that have broken both upward and downward with extreme strength,” the report states.

Bearish outlook for bitcoin

Regarding the bearish case for bitcoin, Glassnode notes that there is very little movement on the network. He also categorized it as follows: “it is very quiet on the network.” As such, the study identified a lack of strength in the pace of creation of new bitcoin addresses, as well as a stagnation in the growth rate of BTC-positive addresses..

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And, on the contrary, both indicators seem to point to negative behavior: “despite the fact that there are about 400,000 new addresses [creadas] per day, there are just as many being emptied of the entire balance.”

While recording an increase in transfer volumes since September, the report refers to a very low level of these volumes today. It also compares them to the lows of this market cycle and to December 2017 levels. That is, from the previous cycle. Similarly. there is little activity in the transactionsalthough there has been a slight recovery recently. However, if these improvements are not sustained, it will not be possible to Would have an impact on the pricethe researchers state.

In light of these behaviors, Glassnode believes that “this indicates that there is a significant degree of apathy within the Bitcoin network, with extremely quiet blockchain activity suggesting a lackluster reading of network usage, attention and user base growth.”

The outlook for the mining sector also does not look promisingfor Glassnode analysts: mainly because of the decline in mining profitability, which is reflected in the decline in hash prices we reported on CryptoNews.

The drop in hash price could prompt miners to dump their BTC. Source: glassnode.

The company estimates that there are currently about 78,200 BTC in the hands of miners, amounting to more than $1.5 billion. This amount of money would be at risk of being liquidated in the market.If lack of profitability leads miners to capitulate.

Possible rise in the price of bitcoin

“Although the usage profile of the blockchain is rather unimpressive, the net impact of current transactions retains a constructive nuance.” So begins Glassnode’s report on the possible bullish factors for bitcoin.

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The first indicator they point to in their report is that of the pattern of Accumulation of BTCwhich we reviewed in this paper. Analysts have argued that there is “a very wide distribution of coins in the hands of [ahorristas] at prices well in excess of $30,000.

Being long-term investors, these individuals are “less sensitive” to their unrealized losses. That is to say. they would have no motivation to sell or liquidate their BTC. in the short term, until prices recover. This is the opposite of the miners, who have to keep their operations in the black.

The accumulation model seems to indicate forward-looking confidence on the part of investors. Source: Glassnode.

Added to this is. The steady withdrawal of bitcoin from exchanges to external wallets. According to analysts, in the month of October alone-incomplete as the report was released on Monday, Oct. 24-more than 123,000 BTC left the exchanges. A significant example is the outflow of BTC from Coinbase which we recently reported on in CryptoNews.

As we said at the beginning, Glassnode does not take a clear position on the direction the bitcoin price will take in the near future. For the time being, it remains sideways in the same ranges as in recent weeks. At the time of writing, however, the problem has not been resolved, BTC is being traded above $20,000, up more than 3 percent from Tuesday, Oct. 25.

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