The Cautious Optimism of Crypto Analysts
As Bitcoin’s price has seen a rebound in 2023, the excitement in the crypto community is palpable. But not everyone is throwing confetti just yet. On-chain analytics platform CryptoQuant has raised its eyebrow, suggesting that this recovery might not sing the same tune as previous bull markets.
Active Addresses: The Bull Market Sweet Spot
In any bull market worth its salt, a surge in active addresses is typically the song of the season. However, in 2023, Bitcoin enthusiasts might want to hold off on the victory laps. CryptoQuant’s Yonsei_dent points out that the number of active addresses hasn’t really shown any growth despite the price climb of almost 50% this year. Think of active addresses like the heartbeats of the crypto market; if they’re not rising, it might be time to check the pulse.
What are Active Addresses?
Active addresses are the moving parts of the Bitcoin ecosystem, representing all the addresses that are sending and receiving BTC. Without a substantial bump in this metric, it seems that even with price increases, market demand is raising its eyebrow instead of pumping its fist.
Comparative Charting: 2023 vs. Previous Bull Markets
Charts can tell a story, and the one accompanying CryptoQuant’s blog post paints a concerning picture. Unlike the post-2018 and post-COVID bear market recoveries, where active addresses surged, 2023 is still waiting for its moment.
“You can see that Active Addresses (30DMA) increased both during the 2019 bull market turnaround and when coming out of the 2020 COVID-19 shock,” Yonsei_dent noted.
Transaction Volume: Where’s the Fire?
Another sign that analysts are keeping their eyes peeled on is the volume of transactional activity. While activity on-chain might be getting a net growth pat on the back, both long-term holders (LTHs) and short-term holders (STHs) are seemingly shy about spending their crypto treasures, which is a tad alarming.
Glassnode Weighs In
Adding another layer to the narrative, analytics firm Glassnode echoes concerns about low on-chain volume. Despite the increase in UTXOs, transfer volumes remain as low as a dog’s belly on a hot pavement. Their weekly newsletter aptly titled “The Week On-Chain” sums it all up.
Bright Spots Amidst the Shadows
However, it’s not all doom and gloom. Glassnode has pointed out signs of improving sentiment. A notable blonde girl in the crowd is that coins sent to exchanges by long-term holders are now primarily in profit, reversing the earlier trend where 58% were sent at a loss back in January.
Now, just 21% of those coins are sent at a loss — progress, perhaps? The numbers imply that sentiment is on the rise, and that’s something to pay attention to.
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