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How to use three technical indicators to understand the rise and fall of Bitcoin

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How to use three technical indicators to understand the rise and fall of Bitcoin

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Recently, "Bitcoin broke through $8,000" on the hot search. For a time, Bitcoin rose, Ripple currency soared, and Ethereum led the rise ... A week later, this drama dominated by Bitcoin did not seem to end, and the transaction volume was once pushed to hundreds of billions of dollars.

In the investment world, "madness" and "fear" exist. Today's "madness" stems from last year's long-term "fear" But this time, CoinCola Institute tracked and analyzed the technical indicators behind the rising market, and deconstructed the "passion" of the market with the "rationality" of the data.

(1) mining and bitcoin prices

Let's talk about the relationship between mining and bitcoin. The core technology of Bitcoin is "blockchain", which is formed by connecting blocks, each block corresponds to a bill, and all transaction information and transfer records of Bitcoin are recorded in the blockchain. Every once in a while, the Bitcoin system will generate a random code on the system node. Because of distributed accounting, all computers on the Internet can look up this code. Whoever finds this code will generate a block and get bitcoin. This process is digging. Computing this random code requires a lot of GPU operations, so miners need to use mining machines with massive graphics cards to make a profit.

1. Bitcoin computing power: starting to pick up.

Remarks: 20 18.6-20 19.5 bitcoin Hashrate.

Source: bitcoinvisuals, CoinCola Keying Institute.

The above picture shows the Hashrate of bitcoin. The hash value of the bitcoin network represents the computing power of the blockchain (that is, the computing power). The improvement of computing power means that miners' investment in mining increases or the number of miners increases. From the second half of 2065438+2008, the hash value went down to rise, from 32EH/s at the end of the year to 50EH/s now, and the recent growth trend is remarkable. The continuous growth of bitcoin hash value (representing computing power) indicates that the market is optimistic about the future of bitcoin.

2. Digging difficulty: step by step.

Remarks: 20 18.6-20 19.5 bitcoin difficulty

Source: bitcoinvisuals, CoinCola Keying Institute.

The picture above shows the difficulty of bitcoin. Since 20 19, the difficulty of bitcoin mining has increased step by step, from 5T at the low point to 7T now. It can be seen that bitcoin has risen rapidly this round, reducing the cost of mining and increasing the number of people entering the market. The increase in the difficulty of mining means that there are profit opportunities in the cryptocurrency market, and the market is generally optimistic.

(2) On-chain indicators and bitcoin prices

The number of active addresses on the chain and the number of transactions on the chain are important indicators reflecting the activity of cryptocurrency, which has a high correlation with the price of cryptocurrency.

The number of active addresses on the 1. chain: linearly increasing.

Note: The number of active addresses on the 20 18.6-20 19.5 bitcoin chain.

Source: coinmetrics, CoinCola Institute.

Active address refers to the address where transactions have taken place every day, that is, how many independent addresses conduct transfer transactions on the chain every day. Since 20 19, the number of active addresses on the bitcoin chain has been rising continuously, and recently it has shown a linear growth. From the lowest point of 65438+540.60 143K in October to 832.592K now. This shows that the rapid growth of cryptocurrency active users is a very positive signal that the market is improving.

2. The number of transactions in the chain: continue to rise.

Remarks: Number of transactions in 20 18.6-20 19.5 bitcoin chain.

Source: bitinfocharts, CoinCola Keying Institute.

Since 20 19, the number of transactions on the bitcoin chain has continued to rise, from 235K at the beginning of 20 19 to 374K now. Moreover, since April and May, after two rounds of sharp rise in bitcoin prices, the number of online transactions has remained at a high level, and there are even signs of short-term skyrocketing.

(3) Lightning network and bitcoin price

In essence, Lightning Network adds another layer to the basic layer of Bitcoin blockchain, with the purpose of making transactions fast and cheap. With the existence of lightning net, users can remit money to each other at any time with little payment. Lightning network not only represents the technical level of Bitcoin, but also is an important basis for the value of Bitcoin.

1. Lightning network nodes: rapid growth.

Remarks: 2018.1-2019.5 bitcoin lightning network node.

Source: bitinfocharts, CoinCola Keying Institute.

The beta version of Lightning Network started on March 5, 20 18 in Bitcoin main network. At the beginning of 20 18, the number of lightning network nodes was only 64, and it increased to 2329 at the end of the year. Since 20 19, the number of lightning network nodes has increased rapidly, reaching 4289 at present. In less than half a year, the number of nodes has doubled. The continuous expansion of nodes indicates the continuous upgrading and development of bitcoin lightning network technology, which is an important indicator of bitcoin price.

2. Lightning network capacity: the growth rate is accelerated.

Remarks: 2018.1-2019.5 bitcoin lightning network capacity.

Source: bitcoinvisuals, CoinCola Keying Institute.

The data in the above figure shows that as of May 15, 2065438, the capacity of Bitcoin lightning network has increased to 1039 BTC, equivalent to 833 US dollars, while it was only 504BTC at the beginning of 20 19, which doubled the capacity of lightning network and accelerated the growth. This means that the expansion of Bitcoin has been well solved in the flash grid technology, which helps the Bitcoin payment channel to remain active and effectively supports the functional application of Bitcoin.

The performance of mining, online trading and lightning network is closely related to the price of bitcoin. On the one hand, the rise of bitcoin price is like a catalyst, which stimulates its performance in mining, chain, lightning network and so on; On the other hand, mining, online trading and lightning net are the important cornerstones of bitcoin price trend and the important basis for bitcoin price expectation.

Edited on 20 19-05-2 1

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