Key Points
- Bitcoin network fundamentals turned positive in October, suggesting a medium-term bullish trend.
- Despite this, analysts have mixed BTC price projections as the US elections approach.
Bitcoin’s network fundamentals showed a positive trend for the first time in October. This has been interpreted by some analysts as a promising sign for the cryptocurrency in the medium term.
Positive Network Metrics and BTC
CryptoQuant highlighted that such positive network metrics have previously been observed during bullish periods. This could suggest a positive outcome for Bitcoin, despite potential short-term corrections or consolidations.
After a recent surge towards $70K, the 30-day average number of active Bitcoin addresses neared the 1 million mark. This level was last seen in June and indicates a significant interest in Bitcoin during last week’s pump.
Mining and Demand Trends
Similar positive trends were noted in the mining segment and network fees. The mining difficulty reached a record high, suggesting intense competition for rewards among Bitcoin miners. This could be a positive catalyst for Bitcoin’s intrinsic value.
Furthermore, the apparent demand for Bitcoin, or the difference between production and inventory schedule, rose to a 6-month high of 256K BTC. Historically, a spike in demand has often been followed by a price hike for Bitcoin.
Despite these positive catalysts, analysts have differing predictions for Bitcoin’s price as the US elections draw near. Felix Jauvin from Blockworks suggested that Bitcoin could remain range-bound until the election is over. Justin Bennett shared a similar view, pointing to whales’ lack of interest in buying during the recent mid-week dip.
However, options traders appeared to remain bullish, as evidenced by their increased purchase of call options ahead of election day. Trading firm QCP Capital noted a peak in short-term implied volatility at election day expiry, with a 10-vol spread over the prior expiry and skews favoring calls over puts.
