The transaction volume is decreasing, the price bottom is coming?
Last week we concluded that Bitcoin will have a short-term change, users would better to hold their crypto in the long-term, our prediction stood largely correct. Let us refresh our prediction on this week’s overall trend of Bitcoin price.
Daily trading volumes — Bitcoin
Last week the daily trading volume had a bounce back, which was 316K at high and 254K at low. The daily trading volume has been on a slow increase since February 2018. It shows the core value of Bitcoin and is the fundamental support for Bitcoin price. Judging from the current tardily trading volume, Biticoin will continue to see a back adjustment, which also means the approach to the price bottom.
Daily trading volumes — Ethereum
The trading volumes of Ethereum was relatively steady last week, but the newest value has decreased to 571K.
Daily Average Hashrate
The hashrate for Bitcoin has decreased to be at a high of 97.58EH/s and a low of 84.12EH/s. Computing power (aka mining hashrate) is a key market metric as it illustrates the networks transactional demand. It has been on a steady rise since last year, which lays the foundation for the value of Bitcoin.
Active & New Adrress
Active Addresses refer to the number of unique “from” or “to” addresses used per day. New Address refer to the number of addressed used for first-time transaction per day. We saw a slight increase last week, which was 678K at high and 571 at low.
There was a slight decrease on USDT, hints the new coming fund was limited.
Google Search Trend
Looking at the past-30 day Google search trend for “Bitcoin”and related terms, we found that the global search for “btc” has decreased a little bit but still seems steady.
Fear & Greed Index (FGI)
FGI was at 47, meaning that the market to show a Neutral sentiment. FGI looks at six different factors to score investor sentiment on a scale of zero to 100 — extreme fear to extreme greed respectively: market volatility (25%) + market momentum (25%) +social media trend (15%) + market survey (15%) + the ratio of Bitcoin in the market (10%) + Google Trend (10%).
Long/Short Position Ratio
The long/short position ratio is at 1.51, indicated the long position is dominating the market, while approaching balanced comparing with few days before. Besides, the volume of the holding has not gone back to the status before the price decreased dramatically on Sept25. Having a “long” position in a security means that you own the security. Investors maintain “long” security positions in the expectation that the stock will rise in value in the future. The opposite of a “long” position is a “short” position. A “short” position is generally the sale of a stock you do not own. Investors who sell short believe the price of the stock will decrease in value.
In the market of contracts, the total positions of long and short are equal. For each long position, there is a short position. If the long/short position ratio is high, then it means that there are fewer people who go long than those go short. According to past experience, if the ratio is too high it is highly likely that we will see a market correction.
In sum, the fundamental index has shown a down trend after the slight sign of recovery: There was an obvious down trend on transaction volume, the deduction on USDT premium implies the limited new entry fund. Fortunately, the hashrate and the number of active address are satisfying. For the price, BTC has kept 9000USD but continued to decrease. The whole market has not shown perfect, but it is also not bad. It is better for users to hold the coin and wait for the recovery.
The bitcoin was 9460USD when this analysis finished written.