Bitcoin’s fundamental strength has grown in recent weeks, which is starting to be reflected in the price action.
After a protracted bout of technical weakness when BTC traded in the lower-priced $ 10,000 region, buyers of the digital asset finally stepped up. They triggered a sharp upward movement, which subsequently pushed the price up to USD 11,000.
Today’s strong rebound strengthened the technical outlook and prompted analysts to set their sights on a move towards $ 11,000 in the near term.
It also seems that this technical strength is perpetuated by the fundamental strength that the crypto has expressed in recent weeks.
An analyst company noted that activity around the cryptocurrency’s wallet count seems to indicate that BTC is engaged in a trend reversal.
This sign of a trend reversal comes when analysts are bullish on the crypto, noting that it may be well positioned to see significant further upward in the coming days.
Bitcoin’s technical strength grows as analysts look further upside down
At the time of writing, Bitcoin is trading up more than 3% at the current price of $ 10,700. This price marks a notable rise from the daily lows of USD 10,200 that were set during yesterday’s slight downtrend.
The weakness the crypto has seen in recent weeks has been a blow to the technical outlook, leading analysts to note that it may be poised for a mid-term bull trend reversal.
However, the region’s strong defense of $ 9,900 to $ 10,000 has been an incredibly positive development for the cryptocurrency, indicating that it could be a strong foundation against which to grow.
A merchant explained that he expects further upwards, noting that the ongoing rebound indicates a rally past $ 12,400 is imminent.
“A scenario you should be looking at,” he said, pointing to the graph below.
Image Courtesy of George. Chart via TradingView.
BTC Wallet activity points to a bullish trend reversal
During this ongoing upsurge, Bitcoin’s daily number of active addresses has fallen sharply.
This is indicative of a shifting trend as these kinds of sharp declines have historically preceded shifts towards Bitcoin in the medium term. This can be seen from the chart below from analysis company Santiment:
Image Courtesy of Santiment.
If this historical trend continues, the current decline in the number of daily active addresses may indicate that this is the start of a new upward trend.
Couple this with Bitcoin’s strong technical outlook, and it looks like the benefit is imminent.
Featured image from Unsplash. Charts from TradingView.