3 Reasons Bitcoin Price Is Showing Strength This Week
Bitcoin (BTC) prices fell 0.3% last week, but new data suggests there are some positives for a rally.
Bitcoin strengthened between $41,800 and $43,900 price range. While the immediate direction of BTC's price is uncertain, there are three things that point to a positive short-term outcome.
Bitcoin generated 702 million dollars in revenue
According to CoinShares, BTC investment products account for 99% of all revenues. Bitcoin received $703 million in revenue, bringing its total global assets to $53 billion.
Additionally, exits for Greyscale's GBTC ETF continue to decline. On the other hand, short Bitcoin investment vehicles that cash in on the decline have seen minor inflows. It is compatible with reversing negative emotions.
It should be noted that BTC investment products experienced over $500 million in inflows at the end of January, and this and the strong GBTC selloff may have played a role in the market correction.
Bitcoin mining stock increases
At the end of January, Bitcoin miners were selling. Mining net flow total was -13,542 BTC on February 1. The metric measures the difference between coins entering and exiting the exchange. A negative number indicates falling mineral deposits. However, at the time of publication, in the last 24 hours, more than 2,400 BTC have been added to the miners. The increase in reserves means that selling pressure by market participants is currently fading.
However, the mining index or MPI is still above 1, which means that on average for a year, miners are now selling moderately. If mineral inventories continue to rise over the next few weeks, the MPI index will decline. An MPI index of less than 1 indicates that miners are underperforming.
Bitcoin payments increase by 35% in a week
Increasing chain revenue during a consolidating market is a sign of network demand. According to blockchain analytics provider Token Terminal, Bitcoin payments created last week increased by 35.71%.
An increase in the use of the Bitcoin network can lead to an expansion of the user base. These parameters improve the user base, and the price tends to follow a positive path.
If the fees are increasing, it means that there is a willingness to pay a large amount from users to be included in the next block. Current market dynamics reflect that narrative, which could bring positive momentum for BTC on the charts.
Related: Bitcoin Buyers Far From $25K Target As BTC Price Sets New February High
Bitcoin price has recovered the 50-EMA
The daily chart above shows Bitcoin's immediate resistance around $44,500. If BTC broke down to the $38,500 support on January 23, it immediately found a place above the 50-exponential moving average. While the highest profit resistance is placed at Bitcoin's swing high at $49,100, BTC may retest $44,500 if the current bullish momentum continues.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.