28.11.2021

Bitcoin Attracting Record Investors, Still Not Enough for Growth

Over the past few weeks, Bitcoin has not impressed its investors with its skyrocketing price. Rather, the opposite is true: the cryptocurrency seems “tired” due to the continuous movement of its value in the horizontal channel. Blockchain analyst William Clemente, however, is optimistic.

According to him, the huge increase in new BTC users can be regarded as a positive factor for the cryptocurrency, which will certainly lead to an increase in its price in the future.

Note that this is not the first time analysts have noted the fact that investors are active. Moreover, immediately after the purchase, the coins are withdrawn to third-party wallets, which most likely implies a desire to keep the asset for a long time.

As an expert under the pseudonym Willie Wu said the day before, this is reminiscent of the so-called Bitcoin supply shock that took place in the fourth quarter of 2020. Then large investors also undertook to accumulate BTC at a rapid pace, which affected the Bitcoin exchange rate and the market as a whole in the next few months.

Bitcoin remains popular

To prove his words, Clemente cited a graph of the growth in the number of new crypto wallets in the Bitcoin network. The growth of users is impressive – it has already reached a historical maximum, because every day an average of 50 thousand cryptocurrency addresses are registered . According to experts, new users are most likely the cause of strong pressure on the reserves of exchanges. Recall that the number of bitcoins on trading floors is rapidly decreasing: in the last week alone, their reserves have decreased by at least 18 thousand BTC .

Here is a quote from an analyst in which he shares his vision of the situation. The replica is provided by Cointelegraph.

Individual investors have been actively buying bitcoin for several weeks now, but finally, we are also seeing the surge in the growth in the number of large holders that we have been waiting for. This week, 17 new whales were born on the blockchain, while their total capital increased by 65,429 BTC.

We checked the actual data: there are really enough so-called whales or large investors in the niche. In particular, there are at least 77,461 Bitcoin addresses on the network today, with the equivalent of at least a million dollars. 10 million and more are at 6646 addresses.

bitcoin cryptocurrency addresses

Distribution of bitcoins between addresses

However, there are also negative factors. The number of daily transactions in the Bitcoin network has dropped noticeably, and Clemente admits that “the activity in the cryptocurrency blockchain is practically dead . The analyst has his own reason for explaining this trend: according to him, the sharp decline in activity was due to the recent increase in the time of creation of the BTC block to record values ​​since 2010. And this can already be explained by a large decrease in hash rate caused by the migration of miners outside of China.

bitcoin cryptocurrencies blockchain

The number of transactions in the Bitcoin network

That is, since the blocks were created for a long time, it also took more time to carry out transactions on the cryptocurrency network. Accordingly, users could not imagine how long it would take to transfer coins – and could choose other blockchains for the operation. However, Saturday’s BTC mining difficulty correction corrected the situation. Yesterday the average block confirmation time was 8.33 minutes, which is slightly faster than the normal 10 minutes.

bitcoin chart block time

Block timeline in the Bitcoin network

Unfortunately, so far the positive factors mentioned by the analyst alone are not enough for a full-fledged bullish breakthrough in the market in the near future. However, such activity of large investors will certainly play a role in the coming months.

After all, by tradition, experienced investors who buy assets after falls at a low cost are ahead of inexperienced players who come into the niche as the hype grows. Accordingly, the current situation could be the first step in preparing for the continued growth of the coin market.

We believe that what is happening in the market today will really contribute to the growth of cryptocurrencies in the future. As history shows, experienced players are the first to enter a position and prefer to buy assets at lower prices. Only then other investors are connected to the niche, ready to get involved with the crypto at a higher price. It is possible that now the market will be boring for the next few weeks or months. However, this is a necessary measure for further development.

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