- Returning long-term holders and a decrease in discussion indicate higher value.
- The Open Interest indicated that buyers were more aggressive.
If you believe that Bitcoin’s [BTC] The rise to $72,000 is the end, several on-chain stats say, “No, it’s just the beginning.” For example, AMBCrypto’s analysis shows that a large number of dormant coins are coming into circulation.
An increase in dormant circulation implies that sidelined long-term holders are interested in the market. Historically, this is a confirmation of the bull market. Furthermore, social dominance spotted that BTC could rise much more than the press time value.
When we compared Bitcoin price and social dominance, we noticed that the correlation was low. In previous bull cycles, low discussion of BTC regardless of price appreciation has been a sign that the coin has not yet reached the top.
Bitcoin has not yet reached its peak
With these signs, it is not out of place to say that the $80,000 to $100,000 predictions could be feasible. But before you get too excited, it’s necessary to assess other metrics.
One metric we can always turn to to make notable predictions in a bull market is the price-DAA divergence. DAA stands for Daily Active Addresses. As such, the relationship between Bitcoin’s price and DAA has played an important role in highlighting the bottom and top of the market.
So traders can use this to determine when to buy and in what period to sell. At the time of writing, on-chain data showed the price DAA was -191.31%. This means that the DAA had fallen much more than the price.
In simpler words, the threshold was recorded implicit that despite BTC’s incredible rise, it has not been able to attract many new or retail investors.
From a trading perspective, this difference could serve as a strong buy signal. Therefore, if activity on the Bitcoin network starts reaching impeccable heights, the price could soar higher than $72,000.
However, it is important to note that this parameter may be best for short-term traders.
A new outbreak seems imminent
On the technical side, BTC buying volume was much higher than the selling side. This indicates that the price could continue to fluctuate towards $80,000 as sellers appear to be falling behind.
In addition, Open Interest (OI) has increased, indicating a strong increase in net positioning. While the OI shows a 50-50 buyer-seller cohort, the increase implies that buyers were more aggressive.
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Price-wise, this rise in OI could be bullish for Bitcoin as the uptrend may strengthen. If the OI continues to rise, a breakout candlestick may appear on the BTC/USD chart.
Should this be the case, shorts with highly leveraged positions could face defeat. While long positions could benefit from the potential upside, traders may need to be careful as volatility can be extreme.