Cryptocurrency Mass Adoption is One Step Closer
Bitcoin’s Lightning Network Transaction Value Quadruples
According to a report released by cryptocurrency analysis company Arcane Research, activity on the Lightning Network has increased considerably over the past year. The number of payments has doubled, while the total value of those transactions has quadrupled.
Roughly 50% of the volume is represented by direct transactions between users. About 30% comes from deposits and withdrawals conducted via exchanges and the rest comes from payments to vendors.
The increase is most likely the result of major players entering the scene and adopting the two-layer protocol that is Lightning Network.
El Salvador’s bold move to adopt Bitcoin as legal tender got off to a rocky start, but in the long run, it seems to have a positive outcome, at least for Bitcoin’s adoption. The country’s official Bitcoin Wallet – Chivo – made Bitcoin easier to use for Salvadorans but also cheaper and faster thanks to the Lightning Network.
Another potential reason for the activity increase is the adoption of the Lightning protocol by CashApp, which is a crypto-friendly mobile payment service developed by Block Inc. The move allows free and almost instant Bitcoin transfers, considering that the Lightning Network scales BTC transactions from about 7 per second to potentially millions, while massively reducing costs.
Going back to Arcane’s report, in August 2021 about 100,000 customers made payments using the Lightning Network but in March 2022, about 80 million people accessed the protocol. This drastic surge in less than a year shows that mass adoption is in the books for Bitcoin and sheds a light on what the blockchain could mean for the way that money moves in the world.
Chart Analysis – BTC/USD
Bitcoin is down more than 8.0% during the last 7 days and it has shown severe weakness after failing twice to move above $47,000 resistance. The digital asset recently dropped below the 50-day Moving Average, which is a sign that bearish momentum dominates the market.
The price at press time is $40,110, so we are very close to the key S/R level at $40K. Although the pair showed some signs of rejection at this support level, today’s price action was mostly bearish, thus increasing the chances of a drop below the said level and a move into the triple bottom at $37,500.
The RSI is not oversold and the MACD lines are spread apart indicating bearish momentum but if the bulls can successfully “defend” the current support, we might see a bounce above the 50 MA. The bullish trend line that is seen on the chart below and the $40K support represent a confluence zone, which usually acts as a strong barrier.
