3 Keys To Understanding How Close Next Bitcoin Bullish Leg Is




Indicators of the global economy may be shifting in favor of bitcoin (BTC), Coin Metrics notes in its latest report on the state of the network. Analysts at the blockchain data research firm have found several clues that allow them to conclude that the pioneering cryptocurrency market is healthier now than in previous months. Therefore, they point out that the next section of the uptrend of the cryptoactive is approaching.

Although the price of the cryptocurrency of Ethereum, ether (ETH), dogecoin (DOGE) and other crypto assets, have exploded recently, the truth is that the growth of bitcoin has not stopped, points out Coin Metrics in their report published this Tuesday, May 11. Given the positive momentum BTC reveals on most of its fronts, analysts believe that the next bullish rally for the pioneering cryptocurrency is about to arrive.

Coin Metrics relies on three keys that it uses as an indication that bitcoin will experience its next surge during the second half of the year. The first of these signals has to do with changing macroeconomic conditions that historically helped drive the BTC market. Second is the data suggesting that the BTC market is in a more vigorous position , while third is the level of adoption that has continued to advance at an accelerated rate.

The dollar will continue to weaken
The weakening shown by the US dollar according to the DXY index , “may be good news for BTC, at least in the short term,” says Coin Metrics in its report. This signal has a historical reference, since BTC usually reacts positively at times when the North American currency weakens.

Another element that usually plays in favor of bitcoin is the law to stimulate the economy or aid aimed at alleviating the health crisis resulting from the Covid-19 pandemic. These direct checks, unemployment benefits, financial aid to states and local governments, can continue, even though the United States has indicated that the economy is beginning to recover.

The printing of money implies a risk of inflation in the medium and long term. For this reason, last year’s relief policies were associated with renewed investor interest in assets such as bitcoin, perceived as a hedge against inflation. And this year there is no less reason to think that they will become a new impulse , as CriptoNoticias has highlighted in its publications.

“Furthermore, the data suggests that the BTC market is in a healthier position than it was a few months ago. The open interest on BTC perpetual futures has readjusted to its lowest levels in months, indicating that leverage has been pushed out of the system. This gives the BTC market a healthier base for the next bullish leg. “

The bitcoin market strengthens
The Coin Metrics report records that the bitcoin market is getting stronger and stronger. One of these signs is that the 40% drop in the hash rate that slowed the network is behind us . In fact, the recovery is such that less than a month after various events in China led to the decline, the hashrate has returned to higher levels than those recorded before these events.

For analysts at the data analytics firm, the rally in the hash rate is a healthy sign for Bitcoin’s continued growth. Furthermore, the bounce shows that the network is resilient and capable of quickly bouncing back after unexpected interruptions.

Other data that the report considers as positive signals is the prediction of the firm New York Digital Group (NYDIG), which said that hundreds of US banks will offer the sale of bitcoin this year. Another sign of strength referred to is the Square report in which it reported that its equity increased by $ 272 million thanks to bitcoin in the first quarter.

Bitcoin adoption doesn’t stop
Although retail investment has recently turned to DOGE and other smaller-cap cryptocurrencies, BTC adoption has continued to grow. This is reflected in the number of addresses that own between 0.01 and 1 BTC, which experienced a large rebound only in the month of April.

From the beginning of 2021 until now, there are 710,000 new addresses with less than one bitcoin. To put it in context, in the same period last year, the number of addresses with this amount increased by a total of 610,000, as the firm adds in its report.

“In another sign of growing adoption, on-chain transfer value rose to its highest levels in April. There was an adjusted transfer value of $ 447 billion in April, compared to $ 366 billion in March and $ 319 billion in February. “

Coin Metrics Network 102 Status.
The weekly newsletter does not leave out the improvement of Bitcoin technology, as the activation of Taproot has officially started, once the miners have started to signal their support . Taproot is expected to go live later this year, bringing many major improvements to how Bitcoin transactions work, such as reduced fees and increased privacy.

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