2020-9-30 05:00 |
Bitcoin’s price has been facing some turbulence throughout the past couple of days and weeks, with buyers and sellers being unable to catalyze any clear momentum in either direction.
Earlier this week, bulls roared when they sent the crypto rallying up towards $10,800, but the resistance just above this price level slowed its ascent, stopping BTC from testing $11,000.
Following a short bout of consolidation, the cryptocurrency eventually began drifting sideways, before facing selling pressure yesterday that sent its price plunging down to lows of $10,500.
Although it subsequently rebounded from these lows and has been trading sideways ever since, it is important to note that the cryptocurrency’s network health has been declining over the past week.
This has come about due to the lack of new entrants to the Bitcoin network, with its turbulent price action likely hampering its adoption amongst new users and investors.
Until there’s more clarity when it comes to the cryptocurrency’s price, it may continue seeing declining fundamental strength.
Bitcoin’s Price Action Creates Air of Uncertainty Amongst InvestorsThroughout the past few days and weeks, Bitcoin’s price has been struggling to garner any momentum in either direction.
It has mostly been consolidating between $10,200 and $11,200, and until one of these levels is decisively broken, its outlook remains unclear.
It is important to note that this has caused trading liquidity on exchanges to trend lower throughout the past week, according to analytics platform Glassnode. On-chain transactional liquidity, however, has been trending higher.
“While trading liquidity decreased due to lower exchange deposits, transaction liquidity rose due to an increase in the volume of BTC transferred on-chain,” they explained.
Until Bitcoin determines its mid-term trend, it may continue watching its liquidity plunge lower.
Glassnode: Network Health Declining Due to Lack of New UsersIn their latest weekly update, Glassnode explained that Bitcoin’s network health has also been declining over the past week, which primarily stems from weakness in their “network growth” category.
“Network Health dropped from a score of 74 to 64 points over Week 39, decreasing by 13.5%. The network growth subcategory lost 8 points due to a decline in the number of new users joining the Bitcoin network. Meanwhile, network activity dropped by 10 points as the number of BTC transactions also fell.”
Image Courtesy of Glassnode.The sharp plunge seen across new users joining the Bitcoin network, transaction volume, and liquidity points to some mounting fundamental weakness.
This could all rapidly shift if the cryptocurrency makes a trend-defining move in the near-term.
Featured image from Unsplash.Similar to Notcoin - TapSwap on Solana Airdrops In 2024
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