Bitcoin has seen a strong reversal since last week’s highs. The cryptocurrency, which traded as high as $7,470 last week, is now changing hands for $6,550 — 12.5% below the highs, but nearly 80% higher than the $3,700 bottom seen in mid-March.
There’s a growing sentiment that recent weakness is a sign that there will soon be a strong bearish reversal back towards the lows, but according to a crypto analytics firm, a key signal that marked the start of 2019’s bull run has appeared yet again. This may suggest that bulls are ready to continue to push Bitcoin higher.
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Bitcoin Interest Is Exploding: What It Means
According to data shared by Glassnode, a leading crypto metrics provider, on April 15th, there’s been a strong increase in the number for “daily new entities on the Bitcoin network.”
The metric’s seven-day moving average, which calculates the number of new users entering the BTC network, has risen from the 6,000 lows in mid-March to 17,000 just recently, an increase of nearly 200% in just a few weeks’ time.
As global markets are plagued with ever more uncertainty, interest in $BTC is increasing.
The number of daily new entities on the #Bitcoin network recently peaked higher than it has in over a year.
— glassnode (@glassnode) April 15, 2020
This is interesting as the metric hasn’t been this high since around April 2019, as the rally from the $3,000s and $4,000s bottom to the $14,000 peak by late-June was starting. The metric did immediately dip after hitting the 17,000 level but remained relatively high until the market peak in June, then fell off dramatically as Bitcoin crashed from its highs.
Fundamentally, growing interest in Bitcoin coinciding with bull runs makes sense: more people interested in cryptocurrency means more buying pressure, which correlates with higher prices as increased demand causes a dynamic in which there is unlikely enough supply at a certain price to keep a market satisfied.
Should historical precedent be upheld, a rally could follow.
Related Reading: This Market Cycle Analysis Suggests Bitcoin Isn’t Done Crashing Yet
Not the Only Positive Sign
It isn’t only the influx of new arrivals into the cryptocurrency space that could be a boon.
According to data from Skew.com, after yet another series of prints, the value of all circulating USDT supply has risen to $6.7 billion, $2.2 billion higher than the approximately $4.5 billion market cap seen at the start of March.
Charles Edwards, a digital asset manager, remarked in January that “major changes in Tether’s market capitalization have led Bitcoin’s price over the last 1.5 years.”
Major changes in Tether's Market Cap have led Bitcoin's price over the last 1.5 years.
5 January 2020 was no different.
A healthy signal.
Keep it printing 🖨️ pic.twitter.com/dfe0dBJzwh
— Charles Edwards (@caprioleio) January 13, 2020
Prior to the nearly 50 percent crash in November 2018 that saw BTC plunge from $6,000 to $3,150, the amount of Tether in circulation fell by hundreds of millions; also, prior to the majority of 2019’s crypto rally was the printing of hundreds of millions worth of USDT.