Bitcoin Payments Hit Lowest Yearly Level Due to Holiday Season Illiquidity Effects
The holiday season has brought a period of illiquidity to the cryptocurrency market, as evidenced by the significant decline in daily Bitcoin payments. According to data from blockchain.com, confirmed Bitcoin payments have reached their lowest point for the year, with only 623,434 transactions recorded on December 26.
Confirmed Bitcoin Payments: A Key Metric
Confirmed Bitcoin payments refer to transactions that have been accepted and included in a block by the blockchain network’s consensus mechanism, making them irreversible. This metric provides valuable insights into investor activity on the Bitcoin network. By tracking confirmed payments, analysts can gauge the level of interest and participation from investors, which can be an indicator of market trends.
Holiday Illiquidity Takes its Toll
The holiday season is typically characterized by a decrease in institutional liquidity, leading to lower trading volumes and volatility. This period of reduced activity often results in lower confirmed payments, as seen in the latest data from blockchain.com. The chart below illustrates the decline in confirmed Bitcoin payments over the past year.
[Image description: A chart showing the daily number of confirmed Bitcoin payments over the past year, with a significant drop on December 26.]
Bitcoin Price and Confirmed Payments: Correlation or Causation?
The relationship between Bitcoin’s price and confirmed payments is an interesting topic for analysis. On December 17, the Bitcoin price crossed its all-time high of $108,000, securing over 857,000 confirmed payments – a 37% increase from yesterday’s 623,000 transactions. This correlation raises questions about causation: Is the price driving the number of confirmed payments, or is it the other way around?
[Image description: A chart showing the daily number of confirmed Bitcoin payments alongside the Bitcoin price over the past year.]
Analysts Expect Imminent Price Recovery
Despite the low confirmed payments, many analysts are anticipating an imminent price recovery above $105,000 as the holiday period comes to a close. This is often associated with increased institutional liquidity and a more favorable market sentiment.
Quantum Computing Will Fortify Bitcoin Signatures: Adam Back
In related news, renowned cryptographer Adam Back has expressed his optimism about the future of Bitcoin security. In an interview, he discussed how quantum computing will enhance Bitcoin’s signature technology, further solidifying its position as a leading cryptocurrency.
Weak Social Sentiment Points to Imminent Price Recovery
The social sentiment around Bitcoin has taken a turn for the worse, with an average ratio of four to five negative comments versus positive ones. However, this low retail investor sentiment could be a sign of an impending price breakout. Market intelligence platform Santiment noted:
"’Vocal traders are now showing severe FUD (Fear, Uncertainty, and Doubt), and that’s good news for contrarians who know markets move in the opposite direction of retail’s expectations.’"
BTC Social Media Sentiment: Comment Ratio
[Image description: A chart showing the daily social media sentiment around Bitcoin, with a low average ratio of four to five negative comments versus positive ones.]
Other Crypto Analysts Share Expectations
Ryan Lee, chief analyst at Bitget Research, also expects an end to Bitcoin’s correction under $100,000. He noted that post-Christmas market activity typically picks up again, with funds positioning for sectors that might benefit from the upcoming inauguration of President-elect Donald Trump.
President-Elect Donald Trump’s Inauguration: A Catalyst for Bitcoin?
On January 20, 2025, President-elect Donald Trump will be inaugurated. This event has the potential to become a significant catalyst for Bitcoin prices. Will it drive prices up to $500K or more?
Magazine: How Shibtoshi Gambled 37 ETH and Became a Shiba Inu Billionaire
[Read more about this incredible story in our latest magazine issue.]
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