External forces are stopping Bitcoin from rallying despite on-chain strength

Published on by Cryptoslate | Published on

Bitcoin has been flashing signs of intense fundamental strength throughout the past several weeks and months, with the turbulent price action seen throughout the first half of 2020 doing little to hamper this strength.

Although BTC's price action typically tracks its fundamental growth, it now appears that "External forces" could be halting any potential uptrend.

One research firm notes that these forces may include uncertainty regarding Bitcoin's multi-month consolidation phase and unknowns regarding its status as a "Risk-on" or "Risk-off" asset.

Bitcoin's fundamental strength mounts despite lackluster price action.

Throughout the past several months, Bitcoin has been caught within a wide trading range between $9,000 and $10,000.

"During Week 28, the compass saw improvements both in terms of GNI and price performance, setting itself up for its 7th consecutive week in Regime 1.".

They further add that high on-chain activity despite a stagnating price is what is helping boost Bitcoin's fundamental strength.

"On-chain activity has been consistently high for the past several months, and while BTC's price has stayed uncharacteristically stable, it is still performing positively relative to the beginning of the year."

It's clear that Bitcoin's price action has not been reflecting the cryptocurrency's underlying strength.

Bitcoin's ongoing consolidation bout is in itself neutral, but the last time BTC saw volatility this low was just before its price crashed in November of 2018.

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