As Bitcoin returns to a 9-month high above $28,000, a growing number of on-chain signals show that the asset may be entering an early bull market.
On Monday, blockchain analytics firm Glassnode said that the Bitcoin market “seems to be changing gears” amid turmoil within the traditional banking system.
recovering momentum
According to the signature weekly reportBitcoin’s average monthly transaction count hit 309.5k/day this week, its highest level since Bitcoin spiked to $64,000 in April 2021. Less than 12.2% of all days see more trades than this.
Meanwhile, more than 122,000 new entities (the best estimate for new unique users) have been appearing on-chain every day, which is higher than nearly 90% of all other days. Most of those days were concentrated around the Bitcoin price peak at the end of 2017 and the 2020/2021 bull run.
“As more people interact and transact within the Bitcoin economy, it is generally associated with periods of increased adoption, network effects, and investor activity,” Glassnode wrote. Increased activity is also driving network congestion and fee pressure, which Glassnode calls “a common precursor to more constructive markets.”
While high network fees can make small transactions more expensive, they are also a boon for miners, who receive those fees for protecting the blockchain. After a chain of insolvencies plagued the industry last year, miner revenue has now returned to its highest point since June 2022 ($22.6 million/day), another encouraging sign that Bitcoin is back in bullish territory.
back to earnings
Glassnode also delved into Bitcoin’s MVRV (Market Value to Realized Value) ratio, a measure of the multiple of unrealized gains held within the coin supply, which has risen to 1.36. After topping $27,000 this week, the ratio is back in its “neutral zone,” meaning prices are “no longer heavily discounted relative to chain market average cost.”
Even though more coins are being obtained, most HODLers still don’t seem to be selling their stash. The proportion of “hot coins” (currencies traded in the last 7 days) still remains “close to cycle lows.”
“Few longer-term investors appear motivated to profit on this rally, indicating notable strength and a reflection of widely held beliefs about Bitcoin’s important role in the future of the global financial system,” Glassnode concluded.
The global financial system began to show cracks this month after the fall of Silicon Valley Bank (SVB), the second largest banking collapse in US history. Since then, the Federal Reserve has taken multiple steps to barrier commercial banks with liquidity, which have been bullish for Bitcoin and gold prices.
Binance Free $100 (Exclusive) – Use this link to sign up to receive $100 free and 10% off your first month’s fees for Binance Futures (terms).
PrimeXBT Special Offer – Use this link to sign up and enter the code POTATO50 to receive up to $7,000 on your deposits.
