Key Points
- On-chain metrics suggest that Bitcoin’s rise to $72,000 is just the beginning.
- Dormant coins moving into circulation and an increase in Open Interest indicate a surge in market interest.
Bitcoin’s Rise: Just the Start?
If you think Bitcoin’s [BTC] climb to $72,000 is the climax, various on-chain metrics beg to differ. For instance, a significant number of dormant coins are entering circulation, suggesting that long-term holders who were previously on the sidelines are now showing interest in the market. This is often seen as a confirmation of a bull market.
Additionally, the Social Dominance metric hints that BTC could rise significantly beyond its current value. Historically, low discussion around BTC, regardless of a price increase, has indicated that the coin has not yet peaked. Given these signs, predictions of Bitcoin reaching between $80,000 and $100,000 seem plausible.
Other Metrics to Consider
Before getting too excited, it’s crucial to consider other metrics. The price-DAA (Daily Active Addresses) divergence is a useful indicator in a bull market. Currently, on-chain data shows a price-DAA of -191.31%, meaning the DAA has dropped significantly more than the price. This suggests that despite Bitcoin’s impressive surge, it hasn’t attracted many new or retail investors.
From a trading perspective, this divergence could serve as a strong buy signal. If activity on the Bitcoin network starts to soar, the price could rise even beyond $72,000. However, this parameter might be more useful for short-term traders.
On the technical front, the volume of people buying BTC is much higher than those selling, suggesting that the price could continue to rise towards $80,000. Furthermore, the Open Interest (OI) has been increasing, indicating a surge in net positioning. This rise in OI could be bullish for Bitcoin as the uptrend might gain more momentum.
If the OI continues to rise, a breakout candlestick might appear on the BTC/USD chart. This could potentially wipe out short positions with high leverage, while long positions could profit. However, traders should be cautious as the volatility could be extreme.
