Bitcoin (BTC) Price Skyrockets as Adoption Reaches Yearly High – What’s Next?

Ibrahim Ajibade
Updated: Nov 20, 2023, 22:51 GMT+00:00

Bitcoin (BTC) price reclaimed $37,000 on Monday as the crypto market started the week strongly. On-chain analysis pinpoints key factors behind the rally.

Bitcoin price

In this article:

Bitcoin Price Insights:

  • Bitcoin (BTC) price rose above $37,000 on Monday as the bulls made a strong start to the week.
  • Transaction fees have steadily increased in November amid a growing spate of Bitcoin Ordinals (BRC-20) transaction confidence in the asset’s potential.
  • During the past three days, BTC’s daily transaction fee has surpassed that of Ethereum, a smart-contract-enabled network.
  • The increasing fees have not deterred the adoption of the flagship asset as both institutional and retail investors are buying in.

Bitcoin (BTC) price reclaimed $37,000 on Monday as the crypto market started the week strongly. On-chain analysis pinpoints the key factors that could drive BTC price forward this week.

CryptoFees data shows that Bitcoin’s daily fees averaged $10.65 million from November 16 to November 18, surpassing Ethereum’s average fee of $6.9 million for the same period.

BTC Transaction Fees Have Surged This Month

Bitcoin’s average transaction fees have notably risen since the start of this month, escalating over 1,000% to a peak of $18.67 on November 16, as per BitInfoCharts data.

This surge reflects the market’s growing optimism regarding the potential approval of a spot Bitcoin exchange-traded fund (ETF) in the US. However, the Securities and Exchange Commission (SEC) remains hesitant, delaying decisions on various Bitcoin ETF applications until 2024.

Bitcoin Average Transaction Fees. Source: BitInfoCharts
Bitcoin Average Transaction Fees. Source: BitInfoCharts

Market analysts also attribute BTC’s transaction fees spike to the revival of Ordinal Inscriptions. These digital assets, akin to NFTs but on BTC’s smallest denomination, satoshis, gained traction earlier this year, signaling Bitcoin’s venture into the NFT sector.

While interest waned as the market evolved, a resurgence occurred as these assets expanded to other blockchain networks like Polygon (MATIC) and Litecoin (LTC)

Bitcoin is Attracting a Load of New Users

Despite concerns that high transaction fees might deter BTC users, on-chain data indicates the opposite trend.

IntoTheBlock reports a new yearly high in Bitcoin adoption, reaching 67.62% this week.

This uptick signifies a rise in newly created active addresses, indicating an influx of new market participants. Furthermore, the volume of BTC held by long-term investors hit an all-time high, with over 1 million addresses owning more than 1 unit of Bitcoin.

Bitcoin Adoption Rate. Source: IntoTheBlock
Bitcoin Adoption Rate. Source:  IntoTheBlock
The New Adoption Rate metric measures the percentage of total active addresses that conducted their first transaction on a given day. This provides clear insights into the rate at which investors are bringing new money into the market.

When new user adoption increases during a price rally, it means that a significant number of new investors are FOMO-ing in and bringing fresh funds in to the market.

Bitcoin Price Forecast: The Bulls Could Target $40,000

The rising wave of new users on the Bitcoin (BTC) network suggests that a fresh capital is flowing into the market. If the new investors keep adding billions of dollars worth of BTC to the market, the bears could eventually succumb to the upward momentum. 

If that happens, the Bitcoin bulls could mount a significant support wall at the the $38,400 area. But with the sentiment surrounding the crypto market still firmly bullish, BTC will likely attract buying interest to force a breakout above that range. 

Bitcoin (BTC) Price Forecast: Source: TradingView
Bitcoin (BTC) Price Forecast: Source: TradingView

But on the flipside, the bears could target another sharp retracement if BTC loses the $35,000 support line. However, losing that support level could send BTC price spiraling toward the SMA-30 of $33,328, which is the next significant support territory. 

About the Author

Ibrahim Ajibade Ademolawa is a seasoned research analyst with a background in Commercial Banking and Web3 startups, specializing in DeFi and TradFi analysis. He holds a B.A. in Economics and is pursuing an MSc in Blockchain.

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