Is It Time for a Bitcoin Breakout?
Last Updated on 6 November 2023 by CryptoTips.eu
Bitcoin (BTC) has been stagnant for days, barely staying above $29,000. The number one digital asset broke below $30,000 since late July and has not been able to recover this level since. It further crashed to $28,800 just yesterday 7 August, but has quickly reclaimed the $29,000.
In addition, BTC has gained 0.4% in the last 24 hours, which is the most significant positive price movement for the last few days. At the time of writing this report, the asset is trading at $29,157, the highest price it has attained since 4 August. The question is, has Bitcoin’s recovery begun?
Bitcoin sees second highest number of inscriptions
It may be too soon to tell if BTC is breaking out or it’s just a relief jump and the market may go back to where it has mostly been recently. However, a significant event happened yesterday. A total of 400,000 inscriptions were added to the Bitcoin blockchain within 24 hours.
According to on-chain analytics platform Glassnode, this is the second largest number of inscriptions added to Bitcoin in one day. Launched early this year, inscriptions represent digital assets, similar to NFTs, inscribed on Bitcoin’s smallest denomination — the satoshi.
The price of Bitcoin was hardly affected by the 420,000 inscriptions added to Bitcoin at the end of July, even though it was the highest number ever added. This makes it likely that the added number of inscriptions is also responsible for the slight increase in the price noticed within the last 24 hours, but no significant price gains may be in view yet,
Bitcoin not strong, but sentiment remains positive
A critical way of measuring investor sentiment is by looking at the rate at which they hold BTC. On-chain data shows that 69.2% of BTC haven’t been transferred in a year. This is a major indication of positive investor sentiment, which may be why Bitcoin is able to float around $29,000.
Even more interesting is that 29.1% of the total supply has been held for more than five years, proving that investors are still positive about the price of the asset in spite of the current market uncertainties.
Although some analysts say that a breakout is close for BTC, some believe it has a 50% chance of crashing to $25,000 before any major breakout occurs. Only time will reveal which prediction is right.
