Two key factors for a new bitcoin breakout

Started the new week on the rise, approaching the round level of $11,000. Over the past five days, the first cryptocurrency has risen in price by 7%.

According to analytics firm Glassnode, the number of bitcoins that have remained unmoved for three to five years has reached a 22-month high. The dynamics of the aforementioned metrics may indicate a growing number of users who prefer to hold bitcoins rather than move, trade or pay with the coins.

Michael Saylor, head of MicroStrategy, the first public company that invested part of its capital in bitcoin, has identified four factors that will allow the cryptocurrency to strengthen its position as a tool for capital preservation and confirm the status of "digital gold". In his opinion, these are: adoption, utility, performance and competing with the first cryptocurrency assets, writes forklog.

In August, MicroStrategy invested about $250 million in cryptocurrency, buying 21,454 BTC. In September, the company bought an additional 16,796 BTC worth $175 million. Last week, the head of MicroStrategy said that in the next six months, the example of his company will be followed by other private firms.

Bloomberg strategist Mike McGlone has identified two key factors that create conditions for a new bitcoin breakout. The first is the growing hash rate of the BTC network. Since January 2020, the amount of computing power used to mine the cryptocurrency has grown from 98 exahash per second (EH/s) to 136 EH/s.

The second factor stimulating the strengthening of BTC is the high activity of wallets with different numbers of coins. McGlone notes that increased transaction activity in the bitcoin network almost always signals the imminent resumption of a rally in the crypto market.

Analyst Byzantine General published a large-scale review on Twitter, in which he explained why he holds bullish views on bitcoin's prospects. In his analysis, he tried to answer two main questions: the share of margin positions and the overall market sentiment.

In total, he examined more than 20 fundamental and technical factors. It turned out that over time the market was less overheated, the influence of futures and margin traders decreased, and the fundamental factors strengthened.