The last week, on Sunday, the Bitcoin price broke the $ 10,000 threshold to fail through Monday morning and bounce again later. Let take a look at what is happening on the exchanges with some data – from the transaction volume to the Google trends and to the price trend of some altcoins.
Round numbers are just like any other number. However, some have some magical effects. Just like celebrating special birthdays and anniversaries, the $ 10,000 mark is a special threshold for the Bitcoin price.
Bitcoin price has stabilized above $10,000 after falling back to 4 figures on 10 February and bouncing back on 11 February. At the time of writing the price is hovering around $10,250.
The Bitcoin exchange rate for the past seven days in dollars. Source: CoinMarketCap.com
Even if you look at the course a little longer, an extremely positive impression remains:
The long-term Bitcoin price according to CoinMarketCap
This chart shows the price trend since mid-2013. We still see the huge peak in early 2018, which is still unmatched. But if we connect the low points, for example, before the big bubble in spring 2019 and late 2019, there is a clear upward trend that could be nicely drawn as an upward curve. There seem to be forces in the market that are looking for exponential growth.
Can this exponential growth be confirmed in other values? We look at various data points below to answer this question.
If you take a closer look at the last chart, you will see gray columns standing closely next to each other below the green price trend. These represent the trading volume measured by CoinMarketCap on all exchanges. And that is clearly on the upswing as is the price; it is currently even significantly higher than in January 2018 and is continuously striving to reach a new all-time high. However, it is not entirely clear how solid the data is and whether part of the volume is being counterfeited by some exchanges, the CoinMarketCap is not yet has sorted out, or is produced by so-called “wash trading”.
An interesting, probably more meaningful addition to this is the weekly trading volume on LocalBitcoins and Paxful. These exchanges serve markets in almost every country in the world by allowing people to exchange bitcoins for fiat money. It is often a solid indicator of how Bitcoin is in demand, especially in emerging markets, since the trades on LocalBitcoins and Paxful usually represent real demand.
Volume on Localbitcoins did not have an increase but volume on Paxfull is constantly incereasing
A look at the transaction volume shows no increased activity on the blockchain.
Number of daily transactions to Blockchain.com
The transaction volume is still well below the peak at the end of 2017, but has clearly recovered from the slump that followed. In July of last year, when the price reached its highest post-bubble level at around $ 12,000, the number of transactions rose again significantly; together with the course, it fell from there, albeit too drastically, and is now on the upward trend again. In the long term this could look like strong growth, but again not an explosive one, but rather a slow, creeping one. Since this trend has little room for improvement due to the limited space on the blockchain, no significant growth is to be expected here.
The Lightning network, which scales Bitcoin offchain, has much more potential. However, no trend towards increased use can be seen here:
Number of Lightning channels according to Bitcoin Visuals
This chart shows the number of public payment channels in the Lightning network. Since it reached its provisional high point in April 2019, the number has dropped significantly but has since stabilized. As with all other values, a slight and quiet upward trend can be noticed here. A similar picture shows the capacity of the public channels in Bitcoin:
Capacity of public Lightning channels according to Bitcoin Visuals.
The largely stagnating number of Lightning channels is not accompanied by an increase in their capacity. There is nothing to suggest that the Lightning Network is growing as a form of payment – even if the two values can say little about how many transactions actually go through the Lightning network. It is possible that despite the stagnation of channels, the number of transactions that happen will increase rapidly. However, there is nothing to suggest this, and so far the only values we have are those that have just been demonstrated.
If it is not apparent that the number of transactions is increasing – could not their value increase? This would mean that Bitcoin does not scale by transaction quantity, but by its quality, which would be as good if not better. However, this cannot be read from the charts either:
This volume has not changed significantly over the past 30 days. There are, after all, two slightly steeper peaks and two somewhat higher lows. But this doesn’t seem to be a clear trend. Over the course of the year we see almost the same pattern as for the values above: There is a slight, non-explosive increase, which, however, still did not reach the level of the peak last summer.
The dollar volume of daily transactions over the course of the year, according to blockchain.com
Google Trend Searches
An inspection of Google trends also reveals little. The search queries for Bitcoin are stable. There is no outbreak to be seen here.
If we zoom out this chart for a longer period of time, we get the same picture as we often do: There is no trend towards an explosion, but stability at a relatively high level and slow, delicate growth.
Bitcoin is therefore stable in almost every respect. There may not be the growth many have hoped for, and in some cases, one could speak of years of stagnation. However, there are no slumps, but a solid and growing trend for Bitcoin and blockchain transactions.
All of this, I think, is not an immediate reason for a spontaneous outbreak, but overall a very positive picture, especially given that the miners are halving the creation of new bitcoins in 86 days. If Bitcoin receives this stability paired with gentle growth, this promises a rosy outlook for investors.
But what about other coins? We look at how the top coins performed in the ranking based on market capitalization.
First of all, it should be noted that Bitcoin’s price gains went directly to Altcoins. The Bitcoin dominance index has fallen from more than 65 percent to a good 63 percent over the past seven days, with the vast majority of altcoins having achieved price gains that are higher than those of Bitcoin.
The majority of the top performers of the last 24 hours are in positions 50 to 100 in the cryptocurrency ranking and in many cases won ten to twenty percent, in exceptional cases significantly more. The trading volume of the altcoins on the exchanges has also increased significantly.
Altcoin Prices in BTC
Most top coins have caught up noticeably against Bitcoin in the past seven days. We look at the most important of them:
Ethereum rate in Bitcoin over the last 7 days after CoinMarketCap.
The price of ether (ETH) has risen from 0.02 bitcoin to about 0.0276 bitcoin over the past few days. Based on the already existing dollar profit from Bitcoin, this results in another 38 percent profit in Bitcoin.
Last 7 days of Bitcoin Cash in BTC.
Bitcoin Cash (BCH) performed similarly, rising from 0.041 BTC to 0.047 BTC. This also results in an additional profit of a good 14 percent.
Ripple (XRP), on the other hand, looked less profitable until 12 February but it bounced later by nearly 20% against bitcoin.
The price dropped about 10 percent for IOTA:
IOTA is facing some problems with some stolen funds from a hack and the network was paused creating some controversial discussions about the reliability of a network that can be paused.
Despite there are not yet clear insights about an increase of retail investors in bitcoin this might be institutional money entering the space before the real bull run starts.
It is worth to mention that we are only 86 days from the block reward halving where the bitcoin production price will double removing a lot of selling pressure from the network. Also, the altcoins’ recent reaction and bitcoin dominance falling is a sign that the market is in an uptrend.
But most importantly we see central banks rush to issue digital currencies a thing that might work as a boost for massive interest in bitcoin and cryptocurrencies.