Bitcoin’s price has remained stable for almost a month, but data in the chain shows an upward trend in new entrants joining the network.
The price of Bitcoin (BTC) remained relatively stable during September and the sharp fall in prices of DeFi’s altcoins and tokens seems to be making the situation worse for many investors.
Despite this lack of upward momentum, chain data reveals that new entrants are joining the Bitcoin network at an alarming rate.
Although the price has not reacted to the strong influx of new entrants, chain analyst Willy Woo believes this is a strong upward signal. On September 30, Woo tweeted:
„We are seeing an increase in new entrants to BTC that are not yet reflected in the price, it doesn’t happen often. This is what traders call divergence, in this case it is obviously bullish“.
As shown in the chart above, the number of new individuals joining the Bitcoin Optimizer network has risen sharply since last week and the metric clearly outperformed the numbers recorded in August. The metric measures the number of clusters (wallets) owned by a given person or group.
What is attracting these new participants?
Some analysts believe that the increase in new entrants could be attributed in part to the sharp decline in DeFi tokens and altcoins. In the last 30 days, many have recorded double digit losses and this may have left investors looking for safer alternatives in the crypto market.
Although the price of Bitcoin failed to break above the USD 11,000 level several times, it has remained stable above the USD 10,000 level for the past month.
Given the current economic and political chaos that is spreading across the United States and other countries affected by the coronavirus pandemic, Bitcoin’s price stability reinforces the argument that Bitcoin is a strong store of value.
Although the US dollar remains the most sought-after asset in the face of the recent financial crisis, it is possible that a second wave of coronavirus infections could adversely affect the global economy. Such an event would probably encourage investors to invest in assets such as gold and Bitcoin, especially if the dollar loses strength.