Glassnode released its first on-chain video report for 2023 on Tuesday, reviewing what could be a database indicator for the emerging crypto bull market.
The company noted that both Bitcoin and Ether prices and on-chain activity have seen little volatility since the beginning of the year, which is historically preceded by other periods of “explosive market movements.” is the same period as
As explained According to Glassnode’s principal analyst James Check, Bitcoin has been trading in a range of around $550 since December 17th.
“This is pretty amazing, and there are very few examples in history of Bitcoin and digital assets actually sleeping to this level in a volatility framework,” Check said.
During the few times in history that volatility has fallen below current levels, Bitcoin has since experienced massive volatility spikes in both directions. After a period of sideways trading, it has fallen more than 50%. Similarly, right after a similar downturn, from April 2019, the market rose from he’s $4,000 to he’s $14,000 within three months.
Looking at on-chain activity, Check noted that “new address momentum” turned positive for the first time since May 2021, the aftermath of FTX’s collapse. This indicates that the monthly average generation of new blockchain addresses is above the annual average, with relatively high activity on the chain at that time.
Analysts believe this could mark a reversal in on-chain momentum similar to what we saw in early 2019, but it could still fail and drop. , is an indicator of what is happening in terms of demand and user base,” he said.
Currently, Bitcoin faces virtually no fee pressure. In other words, there is little demand for block space to process transactions. FTX Before the bankruptcy, it was processing about $65 billion a day, but now it’s only processing $5 billion.
Specifically, large companies with transactions of $10 million or more are significantly less dominant in total transaction volume compared to most of 2021 and 2022.
“There is a lot of trading volume going on related to the FTX-Alameda entity, and a reasonable chunk of this likely has something to do with them,” Check said.
The analyst concludes by examining the realized cap dominance of Bitcoin and Ether. This metric compares the total value of Bitcoin and Ether based on the last time these crypto units were traded and observes Bitcoin and Ether’s share of the pie.
This differs from traditional market cap/market dominance metrics that undervalue certain coins on certain networks. Examples include the many missing Bitcoins believed to belong to Satoshi and the unmoved coins from the Ethereum ICO.
Check argued that the size of each coin’s realized cap drawdown “provides a tool for measuring the size of a general bear market.”
There is currently more real value flowing into Ethereum than Bitcoin.
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