- The value of BTC has grown by 91% since the November 2022 lows.
- As the number of active addresses starts to increase, the price of BTC may continue to rise.
Like Bitcoin’s [BTC] price consolidates at $30,000, the “midpoint” of the 2021-22 cycle, on-chain metrics indicate the market was trending towards a period of re-accumulation, Glasnode found in his new report.
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Volatility, fluctuations and a bull market
Glassnode assessed the depth of the “bull market corrections” so far this year and compared the same to the previous cycles. The on-chain data provider found that “2023 peak uptake was only -18%, which is remarkably shallow compared to all previous cycles.” This, according to Glassnode, suggested that “relatively strong demand underpins the asset.”
The report also touched on BTC’s recovery from the November 2022 bear market lows, when the leading coin traded for just $15,000, finding that its value has risen 91% since then. According to Glassnode, this recovery bears “a remarkable resemblance to the recovery rallies of previous cycles”.
A look at these findings suggested that despite the price volatility and swings seen so far this year, the BTC market continues to show signs of resilience and strength in the current cycle.
Source: Glassnode
Read Bitcoin [BTC] Price Forecast 2023-24
In addition, Glassnode noticed the impact of inscriptions on on-chain activity within the Bitcoin network. Subscriptions led to an increase in BTC network activity a few months ago.
Typically, an increase in this metric is seen as a positive sign of growing adoption and a healthy network. However, the presence of inscriptions, which involved significant reuse of addresses and small transmission volumes, requires a more nuanced interpretation.
With enrollments declining, active address momentum has picked up again in recent months. According to Glassnode:
“Traditional interpretation would have seen the past 2-3 months as an implied decline in Bitcoin network activity. The correct interpretation, however, is that it was simply a product of significant re-use of addresses by merchants of inscriptions, and that network activity was booming, with blocks filling up.
Source: Glassnode
It is banal that the steady growth of the number of active addresses on a coin’s network presages a continued rise in the value of the coin. As long as sentiment remains positive, the price of BTC is expected to continue to grow.