Bitcoin (BTC) briefly rose above a key area of resistance at $9,553 on January 30 to reach its highest point in almost three months. This is the second time within the week that Bitcoin bulls have defended against any attempts to push the number one cryptocurrency below the $9K mark.
The move to $9,553 set a daily high for the third time this past week, having soared past the $9200 and $9400 marks on January 28. Those following the market will also note the rise in purchasing volume and overall market capitalization over the last few days, all of which point to a strong bullish trend.
As of the time of writing, however, Bitcoin is trading a little above $9,200. What gives? Have the bulls lost steam? Or is this just a minor timeout and the run will continue to greater heights in the coming days?
Blockchain research firm, Glassnode believes it’s the latter and even came up with a new metric to assess bitcoin adoption through a rise in wallet addresses, which they believe will propel the next impressive bull run similar to the one in 2017. This new metric is relevant as it appears to coincide with recent Bitcoin rallies; it essentially means more and more people are hopping on board the Bitcoin train, which is good for its market capitalization and ultimately, its price in the coming months. The last time this level of adoption grew, the market entered a year-long bull phase.
Number Of Bitcoin Users Vs. Net Growth Of Entities
It’s not really easy to get the actual number of Bitcoin users based on existing wallets since an individual can own multiple wallet addresses. Plus a Bitcoin address, such as the one used by a crypto exchange, can hold the crypto assets of several individuals.
That’s why Glassnode’s metric maps the number of entities controlling multiple addresses to get a more realistic gauge of Bitcoin adoption. This represents a more sophisticated way to quantify Bitcoin entities beyond counting addresses and oversimplified heuristics.
A spike in net growth of entities preceded the 2017 bull run; plus remember also that the Bitcoin Halving, a strong bullish trigger, is just about a hundred days away. So if historical data is any indication, we could be in for a new Bitcoin price breakout.
According to CoinTelegraph, however, in the event that Bitcoin loses its key support at $9,200, the price could drop further to the 200-daily moving average (DMA) at $8,900. But should the bulls prevail and maintain a price above $9,500, we could see the price rise to over $10,150 over the short term. Only time will tell.