Bitcoin BTC) price wobbled below $28,000 on Monday as global markets began reacting to the Middle East tensions. On-chain data examines the conflicting signals surrounding Bitcoin’s safe haven credentials and how it could impact prices in the weeks ahead.
Bitcoin (BTC) price retraced from the $28,000 level on Monday as tensions heightened in the Middle East. Early clues from on-chain data trends signal how Bitcoin price could react mid-to-long term.
Number of New Addresses Buying Bitcoin Drops to 4-Month Low
On October 8, Bitcoin registered its lowest number of new addresses in four months. Recent macro events surrounding the Middle East tensions could appear to be one driver behind this decline in new users adopting Bitcoin.
Only 367,874 new addresses were created on the Bitcoin network on October 8. According to the Glassnode chart below, Bitcoin’s new-address acquisition rate has not dropped this low since July 22.
Otherwise called Network Growth, the New Addresses metric evaluates the current rate at which a blockchain protocol attracts new users. i.e., by aggregating the number of new wallets created daily.
A significant decline in new addresses is often bearish for a cryptocurrency network as the native coin could struggle to attract fresh demand.
Referencing the Middle East crisis, this decline in Bitcoin Network Growth signals that non-crypto native investors are turning to other more familiar safe haven asset classes as economic uncertainty looms.
BTC’s price currently holds a relatively high support level at $27,500. But if the network growth decline persists, it could weaken market demand in the weeks ahead.
Read More: How To Make Money in a Bear Market
Crypto-Native Investors are Doubling Down on Bitcoin
Meanwhile, crypto-native investors are increasingly leaning into BTC as the Middle East crisis grows. Bitcoin market share within the crypto sector has hit a 4-month peak.
On Tuesday, Bitcoin Dominance (BTC.D) surpassed 51%, the highest since July 12.
Bitcoin dominance represents the percentage of the total cryptocurrency market capitalization that Bitcoin holds. When Bitcoin’s dominance rises, it signals increased confidence in Bitcoin compared to other cryptocurrencies.
Hence, BTC.D reaching a 4-month peak indicates that more investors are leaning into Bitcoin as a store of value, potentially driving up its price. This could be due to economic uncertainty within traditional fiat markets due to the escalation of war in the Middle East.
Read More: 11 Best Crypto Portfolio Trackers in 2023
BTC Price Prediction: The $25,000 Support Could Strengthen
The on-chain data points analyzed above suggest that crypto-native investors will likely reduce their altcoin exposure and demand more BTC in the weeks ahead.
This could increase the BTC price and strengthen the critical $25,000 support level if the Middle East crisis spreads a bearish sentiment across risk-on markets.
The Global In/Out of the Money (GIOM) charts also confirm this narrative. It shows that the 1.57 million addresses purchased 794,850 BTC at the minimum price of $26,600.
Additionally, If bearish sentiment grows, this cluster of addresses will likely prevent the BTC price from wobbling toward $25,000.
Alternatively, if crypto-native investors keep piling into BTC as predicted, the price could hit $30,000. But first, BTC must clear the initial resistance at $29,000.
The chart above shows that 3.7 million current addresses had bought 1.77 million BTC at an average price of $29,020. But if the market FUD grows, they could sell and inadvertently trigger a bearish Bitcoin price reversal.
Read More: : Best Cloud Mining Sites 2023: A Beginners Guide
The post Here’s How Bitcoin (BTC) Price Could React to the Middle East Crisis appeared first on BeInCrypto.