- Lower number of active entities on the Bitcoin network
- Ethereum hits fresh all-time high ahead futures debut
- Ethereum gas fees rising
This week was positive for major cryptocurrencies. Bitcoin managed to bounce off the $31,500 support level on Monday and price reached major resistance at $38,000 on Thursday. Meanwhile Ethereum hit a fresh all-time high yesterday, however rising gas fees may slow down further increases. The capitalization of all digital assets in circulation increased to 1.16 trillion, while an average daily trading volume is registered at $161.8 billion. Bitcoin's market dominance decreased to 60.9%.
Bitcoin is testing resisitance at $38.000
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Create account Try a demo Download mobile app Download mobile appBitcoin briefly fell below the $37,000 level during Asian session after downbeat comments from the Reserve Bank of Australia (RBA) official. The RBA assistant governor for financial systems, Michelle Bullock said, “I think there is a lot of fuss over bitcoin and it’s not a payment instrument and it’s not even real money.” Also Australian Financial Review (AFR) quoted RBA Governor Philip Lowe which said, “It's a risk to investors but it's not a financial stability risk”. However bulls managed to erase losses in the early hours of the European session and price is approaching major resistance at $38,000.
As Bitcoin was creating new all-time highs last month, the network activity also recorded a sharp increase. According to Glassnode Bitcoin’s on-chain activity surged to a new all-time high as over 22.3 million addresses sent or received BTC in January.
In January, the number of active unique addresses reached its all-time high. Source: Glassnode
However, the number of active entities on the Bitcoin network fell sharply last week after spiking at the beginning of January. Glassnode stated that an entity is, according to their definition, “a cluster of addresses controlled by the same network user.” While this metric has since begun to increase again, it has still not returned to levels seen in January.
Number of active entities has decreased by a large margin ever since BTC surged to new highs in early January. Source: Glassnode
Bitcoin is trading within the ascending triangle pattern. Should the price break above the upper limit of the formation marked with red colour, then another upward impulse towards all-time high at $41,900 could be launched. On the other hand, if sellers will manage to regain control, then the support at $34,500 may be at risk. Also, looking at the MACD histogram, one can see that upward momentum has clearly slowed down as of late, which is confirmed by the appearance of bearish divergence. Source: xStation5
Rising gas fees on the Ethereum network
Ethereum reached a new all-time high at $1,700 on Thursday ahead of its CME debut on February 8th and amid rising interest among investors and traders. Peter Brandt, a prominent investor which is a long-term Bitcoin bull , believes that “ETH/BTC is the best bet.” He is so bullish on Ether to the extent of converting a substantial portion of his BTC holdings to ETH.
On the other side, Santiment, one of the leading on-chain analysis platforms, indicates rising gas fees on the protocol which could potentially jeopardize the further price rally. It takes approximately $ 11.45 (the highest in three weeks) to complete a transaction in the Ethereum protocol. Typically, high fees lead to a cooling effect as users wait for their levels to return to normal.
Ethereum transaction fees still remain at high levels. Source: Santiment
Ethereum has been trading sideways after reaching fresh ATH. Currently price is testing the upper limit of the range and if break above occurs then another upward impulse towards $2000 level could be launched. On the other hand MACD histogram is turning negative, signaling rising downside momentum. Break below the long-term trendline will invalidate the bullish scenario and downward move towards support at $1475 may accelerate. Source: xStation5
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