BITCOIN : FUNDAMENTAL ANALYSIS + NEXT PRICE TARGET - LONG

29 mar 2023

More than 60 percent of its value has been added to Bitcoin since the start of the year, and the past week was its greatest since December of 2020. While this is usually the time when investors brace for a pullback, there is good reason to assume that this is the start of a new bull market.

The data can be extrapolated to show activity because blockchain is public and transparent. The worst of the current crypto winter may have gone, according to three indicators generated from bitcoin blockchain activity.

As the blockchain's primary function is to serve as a transaction venue, tracking growth in terms of user numbers and the volume of blockchain transactions makes intuitive sense. It's easy to see how "the more, the better" might be a useful heuristic from this vantage point.

By every measure, the current state of the bitcoin market is unprecedented since before the previous bull market.

It is more useful to track the rate at which new Bitcoin addresses are added to the blockchain than to count how many addresses there currently are. New addresses seem to be joining the network at the same rate they did in the spring of 2021, when Bitcoin was worth $63,500, according to the most current data. Compared to the first 90% of Bitcoin's existence, the creation of new addresses now occurs at a rate of about 122,000 per day.

The volume of trades conducted on the network increased along with its user base. As with the number of addresses, the volume of Bitcoin transactions has reached new heights. There are about 310,000 daily trades now, and that number is expected to climb to about 8.5 million by the beginning of 2023. In March of 2021, levels were last this high.

Miners' commission earnings are another, albeit less well-known, important measure. Fee yields (rather than regular mining fees) typically represent the status of the market as a whole, despite the fact that this statistic is generally neglected. Bitcoin tends to be in a bear market when fee yields are negative. Miners have been making a profit for the first time since the summer of 2021, and this trend is typically followed by bull markets.

Considering these numbers, pessimism about bitcoin's future is misplaced. After nearly two years, there is finally cause for optimism that crypto winter is on the decline.

However, prospective financiers have even more grounds for celebration. The major cryptocurrency is now worth less than half what it was a year ago, despite the fact that its address growth, transaction counts, and miners' fee income have all hit levels not seen since the price was about $60,000. If this pattern continues, investing in bitcoin now, while its price is still significantly lower than its all-time high, could prove to be a wise move.