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Last week, the price of Bitcoin (BTC) rose by 6.95%, from 10,804 dollars on October 5 to 11,555 dollars on October 12. This is the best week for Bitcoin prices since July last year, and data shows that the market’s sentiment towards Bitcoin has changed significantly.
According to TheTie, a digital asset alternative data provider, Bitcoin’s daily sentiment score reached 62.4. This indicator judges whether market sentiment is positive or negative by measuring the tone of conversation on Twitter. Any score higher than 50 indicates that market sentiment is positive.
Bitcoin price and sentiment Source: TheTie
In early October, Bitcoin and other crypto industries experienced a lot of negative news. The US Commodity Futures Trading Commission (CFTC) and the US Department of Justice (DOJ) cracked down on the BitMEX exchange. On October 1, the CFTC and DOJ accused the BitMEX exchange of illegally operating a derivatives exchange. On October 6, the UK Financial Market Conduct Authority banned the retail of cryptocurrency derivatives.
However, neither of these two events produced the negative results that many investors expected. In addition, after experiencing these negative news, Bitcoin has also seen bullish news, such as Square allocates 1% of its assets to Bitcoin.
Overall, the bullish signs of Bitcoin continue to increase. As the price of Bitcoin rises to $11,500, the total market value of the entire crypto industry has increased from $339 billion to $3590, an increase of 6%.
In addition, a recent report surveyed more than 30 experts, including eToro’s cryptocurrency commentator David Derhy, Alpha5 CEO Vishal Shah, and LMAX Group currency strategist Joel Kruger. According to these experts, by the end of 2020, Bitcoin The price will reach $14,283.
Blockchain activities match emotions
Many on-chain indicators are also in line with the positive sentiment surrounding Bitcoin. Although investor activity has increased, prices have not yet kept up. According to cryptocurrency analyst Willy Woo, this marks an increase in “investor activity,” but this is not included in the price of Bitcoin. Woo said:
“Investor activity” is based on on-chain transaction volume. This is because when BTC moves between the wallets of two different participants, we assume that there is an off-chain payment (fiat currency or altcoin). This is an imperfect measure, but it is close to the actual situation. “
Bitcoin NVT (Trading Volume and Price) Source: Woodbull.com
Not only has activity increased, but the number of tokens held on exchanges has also been steadily declining. These trends are similar to the accumulation period before the 2017 bull market.
In the current political and financial turmoil, fundamental analysis and technical analysis have shown signs of bullishness, and Bitcoin seems to be brewing a perfect storm.
DeFi is making a strong rebound
In 2020, DeFi played a key role in revitalizing the excitement surrounding the price of cryptocurrencies and Ethereum (ETH), but in the past two months, most DeFi tokens have depreciated.
According to data from DeFi Pulse, the total value locked in DeFi is $10.89 billion. At the same time, the total value locked by Uniswap is $2.6 billion, and the transaction volume of decentralized exchanges continues to grow steadily.
Total value locked in DeFi Source: Digital Assets Data
According to data from Flipside Crypto, approximately $300 million in tokens are sent to DeFi dapp every day. This exceeds the current daily inflow of US$156 million in centralized exchanges.
Currently, Uniswap alone accounts for 70% of the inflow of DeFi funds, with US$211 million flowing into its liquidity pool every day.
All Ethereum network activity Source: Flipside Crypto
The growth of the DeFi protocol has renewed attention to Bitcoin. So far, BTC worth more than $1.1 billion on the Ethereum blockchain has been tokenized through wBTC alone.
Flipside Crypto pointed out that approximately $385 million of wBTC and renBTC changed hands in September.
The huge obstacle lies ahead
Although many factors indicate that Bitcoin will undergo major changes at the end of this year, it is worth noting that there are still many obstacles ahead. Historical data shows that Bitcoin was sold at least three times this year at a price level of $12,000 due to the exit of miners and whales. With the Bitcoin price approaching $12,000 again, this situation risks a fourth occurrence.
Supervision in the field of decentralized finance is also imminent. For now, traders expect DeFi to rebound. Such an event is likely to push Bitcoin to break through $12,000 and reach a new high in 2020.