Bitcoin has received a lot of attention in the past week, with a gain of 2.58% in seven days data from CoinMarketCap. During this time, the leading cryptocurrency has shifted from trading around $37,800 to almost the $39,000 mark.
Following this positive price movement, Bitcoin has recorded some impressive numbers, which could strengthen investor interest in the coming weeks.
Bitcoin is experiencing its highest level of profitability in two years
Via a Friday post on X, blockchain analytics firm IntoTheBlock reported that 81.35% of all Bitcoin holders are currently making a profit. This marks the highest level of profitability BTC investors have experienced since December 2021, when the token was valued at over $50,000.
BTC profitability reaches its highest level since December 2021!
More than 80% of Bitcoin addresses are currently making a profit. This is the highest value since December 2021, when prices were above $50,000 per Bitcoin
🔗https://t.co/qWhryCeM0D pic.twitter.com/Dod0PuuWbF— IntoTheBlock (@intotheblock) December 1, 2023
Interestingly, Bitcoin’s profitability is likely to move higher, with several factors indicating that the market leader will soon enter the $40,000 price zone.
First, there is currently a lot of optimism surrounding the approval of a Bitcoin Spot exchange-traded fund (ETF) by the US Securities and Exchange Commission (SEC). On Friday, Bloomberg analyst James Seyffart injected a lot of hype into the crypto community when he predicted that this potential approval order would come between January 8 and 10, 2024.
Therefore, in anticipation of the massive institutional demand that a spot ETF could introduce to the BTC market, investors are likely to increase their Bitcoin holdings, which could result in a price increase in the following weeks.
Also the chairman of the US Federal Reserve, Jerome Powell has made statements suggesting that there will probably be no more interest rate increases in the coming months. If true, this development paves the way for Bitcoin, among other digital assets, to experience more price increases as Fed rate hikes are known to discourage investments in risky assets like cryptocurrencies.
However, despite these favorable indicators, it is worth stating that the crypto market remains subject to multiple forces, and all investors are advised to conduct proper research before engaging in the market.
Bitcoin network fees reduced by 50%
Another positive for the BTC community is that the Bitcoin network has experienced a 50% drop in total fees over the past week. InTheBlok reports that this development was due to a drastic decline in the number of ordinal-related transactions.
Launched in January 2023, the Ordinals protocol allows the creation of non-fungible tokens (NFTs), known as BRC-20 tokens, on the Bitcoin network. Similar to the Ethereum network with its own NFTs, a high level of interest in Ordinals results in high network fees and vice versa.
At the time of writing, Bitcoin is trading at $38,758, down 0.17% in the past hour. Meanwhile, the asset’s daily trading volume has increased by 4.97% and is valued at $20.37 billion.
BTC trading at $38,810 on the daily chart | Source: BTCUSD chart on Tradingview.com
Featured image from iStock, chart from Tradingview