- Bitcoin price reached $68,400 on October 16, forming a new higher-high pattern in an attempt to break the 217-day downtrend.
- The range between $68,300 and $67,300 is considered a critical junction for Bitcoin to flip into support and disrupt the downtrend.
- Bitcoin’s active addresses have exhibited a significant surge since early September, indicating improving user engagement and demand.
Bitcoin price registered another monthly high at $68,400 on Oct 16, forming a new higher-high pattern (HH3) in the markets. BTC swiftly registered a new weekly high after a sharp hourly correction of -3.41% on Oct 15. Alongside price, BTC’s on-chain data is also demonstrating a positive improvement, with active addresses indicating a positive shift in market demand and user activity.
Bitcoin Price Analysis
After Bitcoin reached an all-time high of $73,881 in March 2021, BTC has exhibited a 217-day downtrend, forming a series of higher lows and lower lows between a descending broadening wedge pattern. The weekly chart currently illustrates BTC’s fourth attempt at breaking above the 217-day upper trendline, which can have immediate implications on its price trajectory.
Previously, Cointelegraph reported that the range between $68,300 and $67,300 would be a critical junction for BTC, which needs to flip into support to disrupt the aforementioned downtrend. Similarly, veteran trader Peter Brandt highlighted the same range and suggested that Bitcoin price is currently in the “window.” The trader adds, “Will Bitcoin escape through the window or have the window slammed on its head?”
Meanwhile, BitQuant, an independent trader, believes that after breaching $70,000, Bitcoin is likely going to exhibit a prolonged consolidation between $95,000-$75,000.
Bitcoin Active Addresses Exhibit a Positive Shift
While Bitcoin’s price may face market volatility in the short term, improving on-chain metrics indicate that a bullish leg over the long term continues to develop. Data from Cryptoquant indicates that Bitcoin has experienced a significant surge in active addresses since the beginning of September.
As illustrated below, the Bitcoin active address momentum indicator has reversed a downtrend and has been rising for the past 45 days. The active address indicator moving above both the 30-day and 365-day moving averages signals a positive shift in improving user engagement and demand. The Cryptoquant analysis states, “Historically active user participation has been a critical parameter in every bullish cycle, suggesting that demand is returning to the network.”
With Bitcoin’s dominance reaching a three-and-half-year high, the bullish sentiment around the largest crypto asset continues to build after a rocky start to October.
Conclusion
While short-term volatility remains a possibility, Bitcoin’s improving on-chain activity and bullish technical setup suggest the cryptocurrency is building momentum for a sustained move higher over the long term. The market will be closely watching to see if Bitcoin can decisively break out of its long-term downtrend in the sessions ahead.
