Bitcoin Breaks Out, Up 8%, But Data Shows Lack of Demand

Bitcoin (BTC) held above $18,700 yesterday and then recaptured $19,000. The price initially struggled to break through $19,200, but managed to do so last night. Then bitcoin shot to $19,800 and then to a high of $20,200. At the time of writing, bitcoin is even surging past this peak, reaching $20,240 on Binance and $20,960 on Bitvavo.

This means that the bitcoin price is currently 8% in the plus. Trading volume increased by 86.7% in the past 24 hours. The total market capitalization is $386.7 billion and the dominance at 39.8%. The Fear & Greed Index comes in at 20 (Extreme Fear). Talk about it in our Discord surroundings!

Macro and correlation

The macro mainly determines the direction of the financial markets this year and bitcoin shows a very high correlation with risky stock markets such as the S&P 500 and Nasdaq. Both markets closed in the red again yesterday, and even at new lows. In recent months when these markets fell, bitcoin usually fell even harder. Yesterday, bitcoin held up noticeably stronger, but it may be too early to speak of a real decoupling in this macro economy.

Bitcoin traders take profit at $20,000

Analysis firm Santiment reports that many traders were apparently waiting for the $20,000 mark. Once bitcoin broke through this price, investors began to take massive profits. That kind of selling pressure could push the price back down, but we’ll see if these traders will regret their decision to sell, Santiment says.

Low network activity and on-chain volume

Despite trading volume on exchanges currently rising, analyst Cauê Oliveira reports that the number of active addresses on the Bitcoin network is still very low, suggesting that there is currently little demand. This is often accompanied by small declines, which can deter short-term investors and new investors, the analyst says.

In addition, analyst BaroVirtual also talks about a decrease in the on chain volume. This has been declining since September 15, which may indicate investors are losing interest in holding their BTC at current prices. Probably because they expect a drop to new lowspossibly as deep as $12,000-$14,000.

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