Bitcoin’s network activity is skyrocketing. What happens afterwards?

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could be preparing to break out as the on-chain metrics turn bullish.

Key points to remember

  • Bitcoin is up nearly 13% over the past week.
  • A spike in network growth and open interest indicate further gains.
  • Breaking through the $42,100 resistance level would validate the bullish outlook.

Several on-chain metrics suggest that Bitcoin is gaining strength for a significant bullish impulse. Still, the best crypto has a big hurdle to overcome first.

Resuming Bitcoin On-Chain Metrics

Bitcoin seems to be on the mend.

The leading cryptocurrency has been on an impressive uptrend over the past week. It gained nearly 5,000 points in market value, rising from a low of $37,600 on March 14 to a high of $42,400 on March 19.

Although prices have retreated around 5% in the past 48 hours, Bitcoin’s uptrend appears to be gaining strength.

The number of new addresses joining the Bitcoin network has increased significantly since February 21, creating a series of higher highs and lower lows. The upward trend in this on-chain metric suggests growing interest from marginalized investors who appear to be re-entering the market.

Over 480,000 Bitcoin addresses were created on March 17 alone is a strong positive signal for further price increases.

Network growth is often considered one of the most accurate price predictors for cryptocurrencies. A steady upward trend in the number of new addresses created on a given blockchain often leads to higher prices.

Number of new Bitcoin 7-DMA addresses.

Source: Glassnode

A similar upward trend can be seen in the futures markets, where the number of open positions, including long and short positions, has steadily increased since March 7. As open interest increases, more liquidity, volatility and attention shifts to derivatives. markets. A continued increase in open interest to exceed 12.36 million could support Bitcoin’s recent price increase.

Bitcoin Open Interest All exchanges All symbols.
Bitcoin Open Interest All exchanges All symbols.

Source: CryptoQuant

Still, the transaction history shows that Bitcoin has a substantial resistance wall to break through to advance further.

IntoTheBlock’s In/Out of the Money Around Price model reveals that 1.57 million addresses bought nearly 760,000 BTC between $40,900 and $42,100. A decisive daily candle above this hurdle could give Bitcoin the strength to break through the next critical barrier, which sits at $46,500.

BTC IOMAP.
Source: IntoTheBlock

IOMAP also shows that the top-ranked cryptocurrency is holding above stable support, as more than 1 million addresses have already purchased 1.23 million BTC at an average price of $40,300. As long as Bitcoin is trading above this position, it has a chance to move higher. However, failure to do so could lead to a drop to $37,500.

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