Bitcoin (BTC) Hammer candlestick keeps bullish hopes alive
Bitcoin (BTC) saved its bullish structure with a bullish hammer candlestick on Sunday. It also validated a crucial horizontal support area.
Network growth is a measure of the health of a network based on the number of new entries. The calculation shows the number of new addresses that are created in the network. So it shows whether network adoption is happening and whether the project is gaining or losing traction.
Most often, an increase in the number of new addresses leads to a price increase and vice versa.
This effect was visible at the current BTC all-time high, where there was an extremely pronounced bearish divergence in the number of new addresses.
Therefore, while the Bitcoin price has jumped to a new all-time high, interest in the network has not followed suit.
However, the number of addresses has increased in the last month and is very close to reaching the descending resistance line of the divergence. A continued increase may mean that the downtrend is over.
BTC makes bullish hammer
The daily chart shows that BTC bounced sharply on Sunday, creating a bullish hammer candlestick (green icon) in the process. This is a type of bullish candlestick that is characterized by a long lower wick and a bullish close.
In addition to showing strong buying pressure, the candle served to validate the $19,000 area as support.
Moreover, the daily RSI has generated bullish divergence and the trend line remains intact. As long as the trend line is in place, the bullish structure remains intact.
Ethereum
The same cannot be said for Ethereum. The number of new addresses has been falling steadily since May 2021. It has currently fallen below the levels of March 2020. Due to the strong sales last week, it appears that this happened as a result of the merger.
However, the price movement still shows bullish signs. While ETH has fallen since September 11, it is approaching a confluence of support levels near $1200, created by the support line of a descending parallel channel, $1250 horizontal support area and the 1:1 length of waves A:C.
So it is likely to bounce soon, and in turn complete the correction.
For Be[In]Crypto’s Past Bitcoin (BTC) Analysis, click here.
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