Connect with us
Active Currencies 14044
Market Cap $2,569,199,583,254.17
Bitcoin Share 50.80%
24h Market Cap Change $0.38
Bitcoin

Bitcoin [BTC]: Will increasing Taproot adoption boost prices?

2min Read
Posted:
Avatar
editors
Bitcoin ‘fixes democracy’ and fights corruption: Human Rights Foundation
Avatar
editors
Posted:

Share this article

  • Bitcoin Taproot adoption boomed as there was a 5% increase.
  •  Miners faced the heat as selling pressure increased.

The recent increase in Bitcoin [BTC] Taproot adoption gave hope to holders. Notably, on 9 February, the adoption rate of Bitcoin’s Taproot had surpassed 5%. This increase in Taproot adoption, combined with other key metrics, suggested a positive outlook for Bitcoin.

Is your portfolio green? Check out the Bitcoin Profit Calculator

Taproot is an upgrade to improve the privacy, scalability, and security of Bitcoin. It introduced new signature schemes and a flexible transaction structure, making transactions more efficient and private. The growing adoption of Bitcoin Taproot could improve the possibility of BTC growing its presence soon.

Another positive for Bitcoin during this period was the number of non-zero addresses on the Bitcoin network. These addresses reached an all-time high of 43.8 million, according to data provided by Glassnode. The high number of active addresses suggested that more people were using and holding onto their Bitcoin.

Source: Glassnode

There was also a decrease in selling pressure observed.

According to data from CryptoQuant, exchange reserves have declined over the past week. The decrease in exchange reserves indicated lower selling pressure, which was a positive sign for the market.

However, one factor that could increase selling pressure was miner behavior. Miners could sell their holdings if they were facing declining balances and decreased revenue. According to Glassnode’s data, the miner balance declined materially over the past month, reaching a one-month low of 1.8 million at press time.

 

Looking on chain

If the miner revenue continued to fall, the miners would be forced to sell their BTC to be profitable. Another factor that would increase the selling pressure on miners would be the declining revenue generated by them.

Source: Glassnode

However, the declining MVRV ratio of Bitcoin suggested that BTC holders won’t be selling their positions soon. A decline in the MVRV ratio suggested that fewer BTC holders could make a profit if they sold their positions.

Even though most addresses holding BTC are short-term investors, as suggested by the negative long/short ratio, it appeared that all the investors were willing to wait to sell their holdings for a profit.

Source: Santiment

How much is 1,10,100 BTC worth today?

During this period, the Open Interest for Bitcoin also increased. As Open Interest increased, it indicated more liquidity and attention coming to the Bitcoin derivatives market. However, an increased Open Interest also brought with it extra volatility.

Source: Crypto Quant

With factors both for and against it, only time will tell which direction BTC will go in the future.

 

Previous:
Next:

Share

Avatar
Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
Read the best crypto stories of the day in less than 5 minutes
Subscribe to get it daily in your inbox.
Please check the format of your first name and/or email address.

Thank you for subscribing to Unhashed.