Increasing activity by investors with a simultaneous increase in the hash rate and falling stock exchange reserves paint a bullish overall picture on the crypto market. Is the trend reversal imminent?
The weekend brought momentum to the crypto market. On Sunday, total market capitalization reached US $ 1.7 trillion for the first time since mid-June, and the Bitcoin price also flexed its muscles above the US $ 42,000 mark, which has not been reached since May. At the start of the week, profit-taking allows the crypto reserve currency to correct just below 40,000 US dollars, but in the 7-day trend, the crypto flagship is still clearly in the plus at twelve percent.
A similar picture emerges with altcoins. After widespread price jumps, the ten largest crypto assets in terms of market capitalization cede partial profits again. Except for Ethereum (ETH). The second largest cryptocurrency is ahead of the previous day’s level with a 1.3 percent price increase and is thus steadfastly above the 2,500 mark. Dogecoin, on the other hand, posted the largest minus of the top ten crypto assets in a daily comparison with a five percent discount. With Binance Coin (BNB), Cardano (ADA) and XRP, the losses are between 1.4 and 2.4 four percent. Polkadot (DOT) is at least 0.5 percent higher. The weekly balance for the DOT rate thus rises to almost 30 percent increase in value.
The mini-rally this weekend also had an impact on the market sentiment, which has been clouded over for several weeks. For the first time since May the pointer was at Crypto Fear and Greed Index back to “greed”. The bull mood lasted for two days. At the beginning of the week, the mood slips back into the neutral range. Gradually, however, the mood in the crypto market seems to be changing.
Glassnode: Active entities are increasing
The increase in active BTC addresses shows that the summer slump is slowly filling up. As Glassnode writes, “Bitcoin has seen another surge in active entities in the past week”. Active entities are defined as those that either issue or receive transactions. According to the on-chain analysts, the number of daily active entities has “increased by 30 percent from 250,000 to 325,000”.
Stock exchange reserves fall
A rather bullish mood is also evident with a look at the BTC stocks of the largest Bitcoin exchanges. Data from bybt show that investors have eased the reserves of the twelve largest exchanges by around 156,000 Bitcoin in just 30 days. The total supply volume has thus fallen by almost five percent within the last two months.
Hash rate is recovering
While the supply volume is throttling, the hash rate is picking up a gear. Computing power has nearly doubled since the low of 61 exahashes per second (EH / s) on June 27. The hash rate is currently at 112 EH / s and thus roughly at the level of May 2020. So there is still a long way to go before the record high of almost 200 EH / s in April. The hash rate seems to be slowly but surely recovering from the shutdown shock.
Mining difficulty is increasing again
As a result, the mining difficulty was able to slow down its negative trend for the time being. With four consecutive negative adjustments, the Bitcoin network difficulty has corrected itself downwards at a rapid pace over the past few weeks. However, due to the increase in the hash rate, the mining difficulty increased by six percent in the most recent adjustment on July 31.