During October, the fundamental aspects of the Bitcoin [BTC] network shifted towards a positive trajectory for the first time, signaling a promising outlook for the asset in the medium term, as highlighted by an analyst.
As per CryptoQuant, the optimistic network metrics observed are typically associated with bullish phases, indicating a favorable future for the asset despite the possibility of a correction or consolidation.
After a recent surge towards the $70,000 mark, the average number of active BTC addresses over the past 30 days witnessed a significant increase, nearing the milestone of 1 million. This surge in activity levels echoes those observed in June, reflecting a substantial interest in the asset following last week’s price hike.
Could BTC Experience a Surge Soon?
A similar trend of positivity was noted in the mining sector and network fees. Notably, the mining difficulty reached an all-time peak, indicating heightened competition among BTC miners for rewards, which could potentially augment BTC’s inherent value positively.
Moreover, the apparent demand for BTC, represented by the contrast between production and inventory schedules, soared to a six-month high of 256K BTC as of the latest data. Typically, such spikes in demand precede an increase in BTC’s price.
Despite these encouraging factors, analysts expressed varied projections for BTC’s price performance as the US elections drew near.
Felix Jauvin from Blockworks warned that BTC might remain range-bound until the election concluded, citing a reluctance among investors to take on additional risk so close to the event.
“Nobody wants to be a marginal buyer of risk here this close to the election. Probably just a whole lotta chop until it’s over….:
Similarly, Justin Bennett echoed this cautious sentiment, pointing out the lack of interest from whales in capitalizing on the recent dip mid-week.
Since October 17th, the Whale vs. Retail Delta, which monitors the positioning of large investors versus retail traders, has decreased, hinting at whales reducing their exposure to BTC.
Interestingly, options traders exhibited a bullish stance as evidenced by their increased purchase of call options (betting on a rise in BTC’s price) leading up to the election day.
In the daily report on October 22, trading firm QCP Capital remarked,
“Short-term implied volatility is peaking at election day expiry, with a 10-vol spread over the prior expiry and skews favoring calls over puts, despite BTC being about 8% below its all-time highs”