Bitcoin is starting the new year off strong with not only an increase in price to over $4,000, but also an increase in Bitcoin’s lightning network capacity. According to data from Bitcoin analytics provider 1ML, the capacity of the lightning network is up 23% in the past month.
For those who don’t know, the lightning network is a second-layer scaling solution being applied to the Bitcoin blockchain. Currently, Bitcoin’s onchain transactions are far too slow and expensive when the network experiences high volumes of transactional activity.
This was experienced firsthand in December 2017, when Bitcoin reached an all-time high of nearly $20,000. With Bitcoin’s lightning network, Bitcoin transactions can be processed off-chain to provide low-cost, near-instant, scalable, and secure transactions.
Lightning Network Growth Is Accelerating
Currently, the highly anticipated scaling solution can facilitate 557.58 BTC transactions at maximum capacity. This equates around $2.23 million US at current prices, which is no small sum.
Prominent crypto influencer “RideTheLightning” captured a screenshot of the lightning network’s capacity and presented it via Twitter:
Lightning Network capacity continues to grow. pic.twitter.com/Mgi2lC20NX
Not only is Bitcoin’s lightning network growing, but its growth is also accelerating. Just 2 weeks ago, Blockstream, a blockchain development consortium contributing to Bitcoin’s lightning network, surpassed the 500 BTC milestone.
Therefore, it appears that the lightning network’s growth is not only contnuing but accelerating, even despite bearish sentiment and conditions in the overall cryptocurrency market.
Bitcoin Is Flourishing Despite Fallen Prices
Not only is the accelerated growth of Bitcoin’s lightning network positive news for the nascent digital asset class, but the Bitcoin blockchain and ecosystem as a whole have also experienced significant levels of growth. As previously reported by IIB, Bitcoin is stronger than ever.
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To give some examples;
- The r/bitcoin subreddit saw a 61% growth in members.
- Bitcoin’s market dominance recovered from its all-time low of 32.5% to a yearly high of close to 58%.
- Bitcoin’s hashrate has doubled, contrary to what the mainstream media is saying.
- Bitcoin’s price dropped just over 80% while the majority of altcoins dropped well over 90%.
All in all, despite Bitcoin’s drastic reduction in price, it is doing better than ever.
Bitcoin Technical Gauge Turning Bullish
Apart from Bitcoin’s strong fundamentals, technical analysts are beginning to turn bullish on Bitcoin, at least for the short term. Reports from Bloomberg’s Reade Pickert indicate that since Bitcoin surpassed $4,000 for the first time since Christmas, the charts have begun to turn positive.
A tool used to track market trends known as the Directional Movement Index has crossed to a positive zone for the first time since Bitcoin broke the $6,000 level in the middle of November last year. According to Pickert, this signals the end of a very strong selling streak, and could be the transition to a positive buying phase.
“In technical analysis, this makes these levels very strong… But I think only once we see a strong break above 5,000, 6,000, if we get above 7,500, that’s when people start to turn really bullish.”
Another report by Bloomberg stated that the GTI Vera Convergence Divergence indicator is suggesting that Bitcoin has entered its longest buying streak in 6 months.
Therefore, not only are Bitcoin’s fundamentals bullish for its price, but the technicals seem to point in that direction as well. However, nobody knows for sure where Bitcoin’s price will go. All we can do is speculate and wait and see.
Are you bullish on Bitcoin? Has the cryptocurrency bear market ended? Or will Bitcoin’s bullish sentiment be short lived? Let us know what you think in the comment section below.