Bitcoin’s Profit Returns to First Quarter Bullish Levels: Prelude to Another Rally?
In what could pave the way for another price rally, chain data shows that bitcoin’s network utility has recently made a comeback.
In a new post on X, blockchain analytics firm Santiment discusses the latest trend in bitcoin circulation. Circulation here refers to an indicator that tracks the unique amount of tokens moving on the BTC blockchain each day.
Bitcoin Circulation Has Reached 5-Month Highs
Bitcoin flows to U.S. platforms: Here’s what happened last time Often, transaction volume is used to measure utility on the network, which is a metric that measures the total daily amount of BTC transferred on the network.
The downside of this metric is that there is usually a lot of trading activity on the chain, moving the same tokens back and forth. Such activity may not reflect the true value on the network, so the volume of transactions may provide a biased representation of the chain.
Circulation solves this problem by giving the same weight to each token that has transacted on the network. It does not matter how many times it has moved.
If the value of this metric is high, it means that users are currently moving large amounts of unique coins. This type of trend implies that there is a lot of interest in blockchain activity among investors.
Bitcoin circulation has seen a notable increase recently. This growth in the indicator has come after a period of relatively low activity on the network, so it appears that interest in using the cryptocurrency is returning among investors.
The most recent spike in the indicator, which is the largest in this period of renewed activity, saw a movement of 244,000 unique tokens on the blockchain. This is the largest spike observed since March 5, when BTC was in the midst of its rally to an all-time high (ATH).
In general, the utility tends to rise during bullish periods, as investors begin to pay more attention to the cryptocurrency. This activity, in turn, provides a foundation for sustained gains to occur. The fact that supply dropped to low levels after the asset peak may explain why the coin has struggled to generate additional sustained upward momentum.
However, the recent rally appears to have been different so far. “Utilities are gradually returning to levels last seen during the first quarter bull run,” the analyst firm notes. It remains to be seen whether this activity will also benefit asset prices this time around.
BTC Price & Forecast
Bitcoin had rallied as high as $70,000 at the beginning of the week, but the asset appears to have suffered a pullback as it is now trading around the $66,000 level.
According to CryptoPredictions, Bitcoin started August 2024 at $29,277.756 and is predicted to end the month at $51,628.559. During August, the predicted maximum BTC price is $78,654.410 and the minimum is $29,277.756.
Today’s (08/01/2024) BTC price is predicted to range from $58,512.367 to $86,047.598. Bitcoin price is predicted to end today at $68,838.078.
Tomorrow (02.08.2024) the BTC price is expected to be in the range of $59,097.490 – $86,908.074. Bitcoin is expected to open tomorrow at $69,526.459 and close the day at $70,221.724.
By Audy Castaneda