Bitcoin sustained a minor pullback yet again as its dominance continued to hover in 57.6%. As reported earlier by TWJ, short-term concerns for the coin still appeared to be impending. This was evidenced by Bitcoin’s latest price action which registered a minor decline of 1.94% over the past 24-hours. It was currently trading at $10,692.
However, the big picture exhibited a bullish outlook. According to the crypto-analytic firm, Glassnode the Difficulty Ribbon Compression metric appeared to be trending up and recently broke out of the green buy zone for the first time since March. Historically, these have been periods characterized by a positive momentum indicating a significant rise in Bitcoin’s price.
Originally Difficulty Ribbon Compression is a Bitcoin metric derived from Statistician Willy Woo’s Difficulty Ribbon that uses a standard deviation to quantify periods of high ribbon compression. As depicted by the above chart, zones of high compression [or low values] could indicate good buying opportunities for traders and investors.
Bitcoin was currently consolidating close to its $11,044-level, a breakout from which has yet materialized. If the bulls manage to break this level, the coin could further benefit the aforementioned bullish sign to target $12,334.
Some of the main price drivers of Bitcoin were the forays and developments by institutional investors in the space. For instance, financial giant Fidelity Investment’s first institutional Bitcoin fund, which was launched in August this year, has continued to attract other financial heavyweights to date.
Additionally, Bitcoin’s price taking a plunge in tandem with the value of stocks, gold and crypto was not a coincidence nor a technical anomaly. During phases of high uncertainty, simultaneous dips across different markets are normal. But currently, the global market appeared weary, the same cannot be said for Bitcoin. Hence, there is potential for Bitcoin’s price to surge amid the economic tension.
Furthermore, the bulls were prepping up for an upward break in the coming days and this was evidenced by a drop in the figures for Bitcoin balances on exchanges. This was another indication of bullishness among the traders as they balance major exchanges hit its lowest levels since November 2018. This could essentially be signal towards a that a new wave of investors was putting in the capital on Bitcoin as a long-term investment.
Another explanation could potentially be that the traders are taking their Bitcoin off exchanges to deploy them in the burgeoning DeFi. Tokenized Bitcoin such as Wrapped Bitcoin [WBTC] has become one of the largest assets on DeFi and with the ongoing craze in the space, Ethereum has become a Bitcoin’s top off-chain destination.