Bitcoin seeing a dramatic spike in new users!
Bitcoin seeing increasing activity from new users while the price is relatively flat
There is an interesting phenomenon happening right now as it relates to bitcoin, it's price, and activity levels.
Usually the activity levels have correlated very closely with the price.
Especially activity levels from new users.
However, that has not been the case as of late...
Check it out:
As you can see the 7 day moving average of new entities in bitcoin is spiking significantly.
However, the price is basically flat to down over that time.
Something that has rarely been seen when looking back at the chart above.
What's going on here?
We are seeing an influx of new entities transacting on the bitcoin network, but the price is not following suit, which is unusual based on how the two have been correlated historically.
This could be due to bitcoin's correlation with the stock market as of late.
If you want to know where bitcoin is going to go in the near term, you just look to the stock market.
Even when the stock market isn't trading, the futures markets are what bitcoin seems to be following.
The reason for this is because everything is very much based on whether or not we get another round of stimulus here in the United States.
When it looks like we won't get one, stocks tank and it pulls bitcoin down as well, irregardless of the network fundamentals.
It sounds like we are going to get major clarity on whether or not we are going to get more stimulus within the next 24 hours or so.
Which means bitcoin may further break the correlations or shoot right back up depending on the news we get in the next 24 hours.
It's a very weird time we are in currently where stock prices have divulged from the underlying economy and bitcoin is highly correlated to stocks, and both are highly dependent on new rounds of stimulus money.
Therefor the historical fundamentals don't seem to matter nearly as much as they probably should.
That being said I don't think they will be able to continue to divulge like they are currently, forever. Eventually they will matter again regardless whether we get more stimulus or not.
Stay informed my friends.