Last weekend, the Bitcoin price fell below the psychologically significant support level of $50,000. Furthermore, the 50 day moving average was breached to the downside and some popular technical indicators – such as the MACD – are flashing bearish warnings.
The confluence of downwards price action, bearish signals, and negative news flow (primarily; a rumored US regulatory crackdown and the Turkish ban & double exchange failures) suggests a bleak outlook for BTC… So, is Bitcoin doomed?
Recent Drop Brings Return Of Bitcoin Doomsday, But There’s Still Hope Left
Fortunately, there are reasons for hope. Whereas short-term technical and sentiment signals are decidedly bearish, certain fundamental data suggests that the great bull market, begun in late 2020, still has legs. For instance, the number of individuals who own Bitcoin – as measured by Glassnode’s Active Entities metrics – is still rising rapidly. Veteran crypto price analyst, Willy Woo, recently shared the following graph via Twitter:
Rapid growth is clearly visible from August of 2020 and holding steady at present. | Source: Glassnode
“Anyone thinking we are going into a prolong[ed] price correction needs to know about the rate of new users coming into the network per day. We’re in the middle of a bull market with a hockey stick of new adoption, especially in the last 2 weeks,” Woo commented.
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Glassnode’s data is far more reliable than the naive method of counting total or active Bitcoin addresses to estimate user numbers – after all, any single user can create a practically unlimited number of addresses to inflate such measures. While their exact methods remain proprietary, Glassnode attempts to map multiple addresses to individual users, and so count only the latter.
Drivers Of User Adoption In Cryptocurrency
There are countless factors driving user adoption, and one could easily point to the increased visibility of Bitcoin due to its new all-time high or endorsements from influential business leaders, such as Elon Musk and Michael Saylor. Increasing institutional adoption, with such big financial players as MasterCard and BlackRock getting involved, certainly doesn’t hurt the <span class="wpg-tooltip-term-title">Coin</span></h3><div class="wpg-tooltip-content">A coin is a unit of digital value. When describing cryptocurrencies, they are built using the bitcoin technology and have no other value unlike tokens which have the potential of software being built with them.<p class="wpg-read-more"><a href="https://www.newsbtc.com/dictionary/coin/">» Read more</a><p></div>”>coin’s credibility in the popular mind either.
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