Last weekend, the Bitcoin price fell below the psychologically significant support level of $50,000. Furthermore, the 50 day moving average was breached to the downside and some popular technical indicators – such as the MACD – are flashing bearish warnings.
The confluence of downwards price action, bearish signals, and negative news flow (primarily; a rumored US regulatory crackdown and the Turkish ban & double exchange failures) suggests a bleak outlook for BTC… So, is Bitcoin doomed?
Recent Drop Brings Return Of Bitcoin Doomsday, But There’s Still Hope Left
Fortunately, there are reasons for hope. Whereas short-term technical and sentiment signals are decidedly bearish, certain fundamental data suggests that the great bull market, begun in late 2020, still has legs. For instance, the number of individuals who own Bitcoin – as measured by Glassnode’s Active Entities metrics – is still rising rapidly. Veteran crypto price analyst, Willy Woo, recently shared the following graph via Twitter:
Rapid growth is clearly visible from August of 2020 and holding steady at present. | Source: Glassnode
“Anyone thinking we are going into a prolong[ed] price correction needs to know about the rate of new users coming into the network per day. We’re in the middle of a bull market with a hockey stick of new adoption, especially in the last 2 weeks,” Woo commented.
Related Reading | Bitcoin Price Breakdown: Bulls In Trouble As $50,000 Is Lost
Glassnode’s data is far more reliable than the naive method of counting total or active Bitcoin addresses to estimate user numbers – after all, any single user can create a practically unlimited number of addresses to inflate such measures. While their exact methods remain proprietary, Glassnode attempts to map multiple addresses to individual users, and so count only the latter.
Drivers Of User Adoption In Cryptocurrency
There are countless factors driving user adoption, and one could easily point to the increased visibility of Bitcoin due to its new all-time high or endorsements from influential business leaders, such as Elon Musk and Michael Saylor. Increasing institutional adoption, with such big financial players as MasterCard and BlackRock getting involved, certainly doesn’t hurt the coin’s credibility in the popular mind either.
Related Reading | Bitcoin Loses Important Lifeline That Got Bulls Blood Pumping
In the broader context, it’s likely that the deteriorating value of fiat plays a major role in Bitcoin user adoption. Global inflationary expectations – and indeed, observations – remain high. Central banks around the world printed unprecedented amounts of new fiat to offset the economic damage of governmental lockdown policies.
With the cost of goods and services up and largely expected to go higher, widespread demand for deflationary monetary alternatives like Bitcoin makes perfect sense. This is especially true in the current context of under-performance by traditional hard money options, like gold and silver.
Bitcoin price rises as more user adopt the technology | Source: BTCUSD on TradingView.com
So long as Bitcoin adoption by new users is increasing, the prospect of a prolonged bear market seems unlikely. If adoption has been growing throughout the bull trend, as Glassnode’s data indicates, it seems that higher prices are not deterring new entrants to the market.
With Bitcoin now trading “at a discount” compared to its recent all-time high around $64,500, it’s likely that sufficient demand, perhaps spurred by bargain-hunting, remains in the market to provide price support.
The Cycle Started, Mike Novogratz Says – Bitcoin Boom Is Here; Jack Dorsey Boosts BTC’s Price
Mike Novogratz is one of the essential names in the crypto space which is celebrating the booming price of Bitcoin.
Check out what he had to share with his followers and Twitter fans:
Crypto wealth is approx 50bps of global wealth. That means if you don’t have at least 1/2 percent invested in crypto you are short the global benchmark. Most institutions are still at 0. As they move in, that number will go to 1 then 2 then….
The cycle has started.— Mike Novogratz (@novogratz) October 16, 2021
Someone hopped in the comments section and said this; ‘Anyone who has not yet embarked on the crypto band wagon is a simple minded idiot who knows nothing about markets, freedom or wealth creation.’
Jack Dorsey boosts the price of BTC
It’s been also revealed that Jack Dorse said that Square could build a BTC mining system – this obviously triggered a more massive price race for the king coin.
At the moment of writing this article, BTC is trading in the green and the king coin is priced at $61,118.15.
CNBC online publication just noted that Square CEO Jack Dorsey said late on Friday the company is considering jumping into BTC mining business.
Dorsey tweeted that the company is considering a “bitcoin mining system based on custom silicon and open source for individuals and businesses worldwide.”
Square is considering building a Bitcoin mining system based on custom silicon and open source for individuals and businesses worldwide. If we do this, we’d follow our hardware wallet model: build in the open in collaboration with the community. First some thoughts and questions.— jack⚡️ (@jack) October 15, 2021
Dorsey’s goal would be to make crypto mining more accessible. We suggest that you check out the complete thread that Dorsey shared on his social media account in order to learn all the available details.
Pantera Capital’s Dan Morehead: Bitcoin (BTC) Already Up 100% in This Bull Run
How big is median increase in Bitcoin (BTC) price in bullish market phases?
As Bitcoin (BTC) reclaims $62,000 level, Dan Morehead, CEO of the first-ever cryptocurrency-focused VC firm in the U.S., shares the comprehensive statistics of the last six bull runs for Bitcoin.
Bitcoin (BTC) price doubled in 87 days: Bull Run 2021
According to the latest tweet by Mr. Morehead, the Bitcoin (BTC) price witnessed a 2x increase in the first 87 days of the ongoing bullish wave.
#bitcoin at $61,000 is 2x from where we mark the start of this new bull market in July.
For perspective, the median bull cycle went up 15x over 300 days.
More thoughts on the state of the market here: https://t.co/g46sxp7Qe6 pic.twitter.com/Iy96sJvZzO— Dan Morehead (@dan_pantera) October 15, 2021
Unlike many other experts, Mr. Morehead identifies two separate “bull run” phases in 2020-2021. During the previous one, between March 16, 2020, and April 14, 2021, it took 394 days for Bitcoin (BTC) to increase its price 13x and print a new all-time high.
According to his infographic, the most impressive rally ended with a 106x increase of the orange coin’s price in 2015-2017.
That said, the median Bitcoin (BTC) price bull run lasted for 300 days and increased the “king coin’s price” by 15x.
Will Bitcoin ETF mark the top of the BTC cycle?
At the same time, according to “The Next Price Era” letter issued by Pantera Capital on Oct. 6, 2021, the hotly-anticipated approval of Bitcoin (BTC) ETFs is listed amidst the possible “sell the news” events.
Mr. Morehead noticed that the launch of CME Bitcoin Futures and Coinbase direct listing triggered painful bear markets:
Will someone please remind the day before the bitcoin ETF officially launches? I might want to take some chips off the table.
As covered by U.Today previously, similar statements were made by CNBC’s Jim Cramer.
The seasoned analyst also revealed his plans to “cash out” 50% of his Ethereum (ETH) bags.
Bitcoin Will Significantly Underperform Altcoin Market As New Crypto Price Era Unfolds: Pantera Capital’s Dan Morehead
The founder and chief executive officer of Pantera Capital says that investors can expect altcoins to outperform Bitcoin (BTC) in the long term.
In a recent edition of Pantera’s Blockchain Letter, the head of the digital asset management firm outlines Dan Morehead’s key quotes from the SALT 2021 conference in New York. During the conference, Morehead said that even though his company has greatly profited from BTC, he emphasized that most future crypto gains will come from altcoin investments.ADVERTISEMENT
“My perspective is: Bitcoin has been amazing – Pantera Bitcoin Fund is up 67,000% since inception. However, I think the majority of future gains will be from tokens outside of Bitcoin. I know that sounds heretical to some people here, but that’s my professional opinion.”
Morehead compares the rise of Bitcoin and its competitors to that of the tech industry boom during the late 1990s.
“It’s like saying in 1998 that [the] majority of future tech gains would come from outside Microsoft.
At the time, Microsoft was worth $218 billion, Apple $3.5 billion, Amazon was $2.2 billion. Google and Facebook were zero – they didn’t even exist. In the years since Microsoft did great – it went up 10x. However, 80% of the tech gains in these five stocks came from outside Microsoft.
That’s the view I have here – I think BTC is going to go up a ton – like 10x. It’s a great investment…[but] I think the broader portfolio is going to outperform.”
At time of writing, BTC has a market cap of $1.156 trillion while all altcoins combined have a market cap of $1.327 trillion, according to CoinMarketCap.