Bitcoin crosses $8000 and one of the natural questions is when will we hit 10,000? Or will Bitcoin run out of gas and go through a correction?
First, it’s important to note that while crossing $10,000 would be an all-time high, $10,000 is more of a symbolic milestone rather than one of vital importance.
Let’s see where we are by looking at a current chart from our friends at Bitcoincharts.com. This is Bitstamp showing the last year in Bitcoin with a 50-day simple moving average and the Bollinger Bands, both of which we’ve talked about in previous posts.
You can really see the amazing growth of Bitcoin in this 12-month chart. The last major drop in Bitcoin price in early November matches the highest volume of recent weeks, which you can see with the big red line going up to $6000 point where it nearly touches and bounces off the moving average. This is also a sign there is more buying pressure than selling pressure at the moment as all the sales and shorts seem to have cleared out in that price drop and volume went back to normal afterward. The sentiment is bullish.
Investor Trace Mayer thinks Bitcoin will reach $27,000 in 4 months based on the increase in the 200-day moving average in this CoinTelegraph piece. The 50-day average on the chart is around $6500 and the 200-day is around $5800, both healthy and growing.
The Bollinger Bands show us that the bands are getting a little wider and the moving average is near the bottom band while the current trading range is near the upper band. This is mostly neutral to bullish.
Pro 10,000 Fundamentals
The technical signs of Bitcoin are healthy but what about the fundamentals? We’ll look at a couple signs.
One of the ongoing stories about Bitcoin this year is the mempool and transactions stuck there. While that happens from time to time, the truth is confirmations have been consistent. From Blockchain.info, here is a chart of the last 12 months confirmed transactions per day in the mempool.
The range of between 250,000 and 350,000 transactions per day covers the entire year except for part of Jan 2017 and August 2017, which is attributed to the uncertainty surrounding the Bitcoin Cash fork. Current transaction volume is above 350,000 per day, which last happened during May and June.
Huge Increase in USD Transaction Value
All this is happening while the price has increased by 10x, meaning that the number of transactions is consistent but the average transaction size in USD volume has skyrocketed. Daily transaction volume is now more than $2 billion per day. Here’s the chart.
It looks a lot like the price chart….
When it comes to usage, this can be a challenge to measure but one good measure is the number of Blockchain wallets created. In the last 12 months, the number of wallets increased from 10 million to 19 million, a 90% increase in one year. More people are using Bitcoin when more wallets are being created and used.
Here’s the tally of what we looked at in this post:
- Sentiment: Bullish
- Moving Averages: Bullish
- Bollinger Bands: Neutral to Bullish
- Mempool Activity: Neutral
- USD Transaction Value on the Blockchain: Bullish
- Users measured by Wallets: Bullish
While not likely to be a straight line upwards, it looks like Bitcoin will hit $10,000 each and probably sooner than later.
What do you think? Tweet us @magnr with your comments.