showing strength after a poor performance in the last two weeks.
The central theses
- Bitcoin has regained 1,500 points in market value in the last 16 hours.
- The network is expanding, suggesting further upside potential.
- Bitcoin needs to sustain above $38,500 to have a chance to rally to $41,570.
Bitcoin has recovered from a crucial support level after entering the monthly trading session in a weak form. On-chain and technical metrics suggest that more gains may be on the horizon.
Bitcoin is preparing for the rebound
Bitcoin looks like it is gaining momentum for a recovery rally. If successful, it could eventually surpass the crucial psychological $40,000 mark.
The topcryptocurrency has fully recovered from the 4% plunge earlier in the month. Bitcoin has regained over 1,500 points in market value over the past 16 hours, briefly surpassing $39,000. As network growth has been on the up, more gains could be on the way.
The number of newly created addresses in the Bitcoin network has been trending upwards for the past two weeks. As Bitcoin fell from a high of $43,000 on April 21 to a low of $37,350 on May 1, the number of new addresses created on the network rose to 421,800 addresses from a seven-day average of 401,300 addresses.
Such on-chain activity indicates a sustained increase in user adoption over time, which could have a positive impact on Bitcoin’s price.
Bitcoin – Number of new addresses (7-DMA).Source: GlassnodeAdditionally, as the network expands, Bitcoin appears to have broken out of a falling wedge that has been developing on its four-hour chart. The height of the pattern’s Y-axis suggests that a more than 8% increase in bullish pressure could propel Bitcoin towards a target of $41,570.
Source: TradingViewHowever, Bitcoin needs to continue trading above $38,500 to confirm the bullish outlook.
If it fails to hold above the critical support area, traders might be emboldened to close their positions in anticipation of a downturn. The potential increase in selling pressure on a break of the $38,500 support level could see Bitcoin retest the recent low at $37,350 or lead to a lower low at $35,950.
The top crypto asset has had a rough few months amid macro uncertainty and cryptocurrency market exhaustion. Despite the optimistic outlook, it is still trading over 40% off its November 2021 peak of $69,000. At current prices, this is market capitalization from Bitcoin about $741 billion.
Source: Crypto News Deutsch