As tensions escalate in the Middle East, Bitcoin (BTC) prices fell from the resistance level of $28000 on Monday.As the global market began to react, the number of new Bitcoin addresses fell to a four month low on October 8th
- As tensions escalate in the Middle East, Bitcoin (BTC) prices fell from the resistance level of $28000 on Monday.
- As the global market began to react, the number of new Bitcoin addresses fell to a four month low on October 8th.
- At the same time, Bitcoin's dominant position (BTC. D) has surpassed 51% for the first time since July, highlighting Bitcoin's safe haven position.
As global markets began to react to tensions in the Middle East, Bitcoin (BTC) prices fell below $28000 on Monday. On chain data studies the conflicting signals surrounding Bitcoin hedging vouchers and how they affect prices in the coming weeks.
As tensions escalate in the Middle East, the price of Bitcoin (BTC) fell from the $28000 level on Monday. The early clues to the trend of on chain data indicate the medium to long-term response of Bitcoin prices.
The number of new addresses purchasing Bitcoin has dropped to a 4-month low
On October 8th, the number of new addresses registered on Bitcoin reached its lowest level in four months. The recent macro events surrounding tensions in the Middle East may be one of the driving factors behind the decline in new users adopting Bitcoin.
On October 8th, only 367874 new addresses were created on the Bitcoin network. According to the Glassnode chart below, the new address acquisition rate of Bitcoin has never dropped to such a low level since July 22nd.
The new address metric, also known as network growth, evaluates the current rate at which blockchain protocols attract new users. That is, by summarizing the number of new wallets created each day.
A significant decline in new addresses is usually detrimental to cryptocurrency networks, as native tokens may struggle to attract new demand.
Referring to the Middle East crisis, the decline in Bitcoin network growth indicates that as economic uncertainty approaches, local investors in non cryptocurrencies are shifting towards other more familiar safe haven asset classes.
The price of BTC is currently at a relatively high support level of $27500. But if network growth continues to decline, it may weaken market demand in the coming weeks.
Local investors in cryptocurrencies are doubling their investment in Bitcoin
At the same time, as the Middle East crisis intensifies, local cryptocurrency investors are increasingly leaning towards Bitcoin. Bitcoin's market share in the cryptocurrency sector has reached its highest point in four months.
On Tuesday, Bitcoin's advantage (BTC. D) exceeded 51%, the highest level since July 12th.
The dominant position of Bitcoin represents its percentage of the total market value of cryptocurrencies. When the dominant position of Bitcoin rises, it indicates that people have increased confidence in Bitcoin compared to other cryptocurrencies.
Therefore, BTC The 4-month high of D indicates that more investors are inclined to use Bitcoin as a means of storing value, which may push up its price. This may be due to the economic uncertainty in the traditional legal market caused by the escalation of the Middle East war.
BTC Price Forecast: The support level of $25000 may strengthen
The on chain data points analyzed above indicate that cryptocurrency native investors may reduce their exposure to counterfeit currency and demand more Bitcoin in the coming weeks.
If the Middle East crisis spreads bearish sentiment in the risk market, it may increase BTC prices and strengthen the key support level of $25000.
The Global Fund Inflow/Outflow (GIOM) chart also confirms this statement. Data shows that these 1.57 million addresses purchased 794850BTC at the lowest price of $26600.
In addition, if bearish sentiment intensifies, this group of addresses may prevent BTC prices from fluctuating towards $25000.
Alternatively, if cryptocurrency native investors continue to flock to BTC as expected, the price may reach $30000. But first, BTC must clear the initial resistance level of $29000.
The above figure shows that 3.7 million current addresses purchased 1.77 million BTCs at an average price of $29020. But if the market FUD increases, they may sell Bitcoin and unintentionally trigger a bearish reversal in Bitcoin prices.
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