by Yasin Ebrahim
Investing.com – Despite the recent volatility, it rose double digits in August. And possibly the largest cryptocurrency by market capitalization beckoning further price gains. The reason: the activity on the blockchain shows an “impressive divergence”.
In 24-hour trading, it fell 0.94% to $ 47,300, according to Investing.com data. However, the cyber currency ended August with a price gain of more than 13%.
However, the strong BTC growth in the past month did not bring the activity in the Bitcoin network the expected upturn. However, this divergence is reminiscent of the rally from mid to late 2020, during which the popular cryptocurrency more than quadrupled in value.
“The number of active entities in the Bitcoin network is currently 275,000 per day, about 35% below the peak reached in January,” according to data from on-chain analysis company Glassnode earlier this week.
The current level of activity on the chain shows an “impressive divergence” that “resembles the stable area before bull accumulation in mid-late 2020,” added Glassnode.
Another sign of improving fundamentals is the decline in short-term Bitcoin owners who were blamed for panic selling during the recent crypto crash.
Young coins, i.e. those that are less than three months old, only make up 15% of the coin supply. According to Glassnode, a very strong downward trend can be observed here.
The bull case for BTC was also promoted by the entry of institutional investors who are, however, still at the beginning of the adaptation process, but want to use the diversification advantages of BTC in their investment portfolios.
“According to our calculations, there was only a moderate positive correlation between the monthly BTC returns and the major stock indices. The Pearson coefficient has been around 0.27-0.29 (around 0.16-0 , 18 over 10 years). ” so Edison Research in a press release.
“Together with the strong BTC performance over a longer time horizon, there is a positive effect even with a small allocation of 1 to 5% in BTC,” it continues.
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